Insights 
VT 
Silver prices have increased to approximately $36.10 early on Monday in Asian trading. This rise follows the US attacks on Iran’s nuclear sites, which has heightened tensions in the Middle East.
Iran’s vow to respond has created apprehension in the market. Any potential escalation could boost demand for safe-haven assets like silver. US President Trump has stated that any retaliation from Iran will invite a stronger response.
Fed’s Potential Influence
US Federal Reserve officials, including Governor Waller, have hinted at potential interest rate cuts as soon as July. This dovish sentiment has supported silver prices since lower rates can make the metal cheaper for foreign buyers.
Nevertheless, the renewed demand for the US Dollar might limit silver’s price growth. Market participants are looking forward to the preliminary US S&P Global PMI for June. Strong US data could bolster the Dollar in the near future.
Silver is utilised in various industries due to its high electrical conductivity. Fluctuations in industrial demand can impact its price, with the metal being used extensively in electronics and solar energy, as well as gold. Silver often mirrors gold’s price movement, influenced by similar factors including geopolitical and economic stability.
The sharp push in silver prices to around $36.10 reflects two pressing factors: geopolitical unrest and monetary policy shifts. With strikes on sensitive infrastructure in Iran and Tehran issuing a warning of repercussions, safe-haven assets have begun to absorb the shock. Silver, known for its dual role as both a store of value and an industrial metal, typically benefits from heightened political risk. As we saw early Monday, that pattern continues, and market anxiety appears to be building.
From Washington, the tone has turned more defensive. President Trump’s clear warnings against retaliation suggest that any further moves could escalate the situation quickly. Market reactions have followed suit—volatility has increased, and silver is being favoured by those seeking downside insurance. Traders should consider the potential for further price firming if tensions worsen, especially if headlines become more direct in tone or activity resumes in the area.
Monetary Positioning and Market Dynamics
Meanwhile, in the background—but hardly inconsequential—monetary positioning is lending additional support. Governor Waller, among others at the Federal Reserve, has left the door open to rate cuts as early as July. Lower borrowing costs reduce the opportunity cost of holding metals that yield no interest, such as silver. That’s one reason the current environment, which was already slightly favourable for metals due to softening inflation, has now become a little more supportive. From this angle, the bias has tilted further towards buying.
Yet it’s not completely one-way traffic. The Dollar has found pockets of strength recently, which often serves to cap gains in commodities traded in USD. If the upcoming S&P Global PMI data surprises on the upside, the Dollar might rally again, challenging further silver upside in the short term. This creates a two-speed setting where safe-haven demand pushes up, while a firmer Dollar can lean back against that move.
From a structural perspective, silver remains sensitive not only to broad sentiment but also to shifts in manufacturing appetite. It gets used heavily in electronics, photovoltaics, and in chemical processes wrapped around clean energy. Any dents in demand in these sectors will have a measurable effect. We also keep watch on gold: their price paths tend to travel together, often responding in similar fashion to macro economic signals.
We’ll be monitoring for forward guidance from the Fed at scheduled speaking events and closely watching physical silver delivery trends. If there are stronger flows into ETFs or tighter spreads in dealer markets, that may reinforce that capital is rotating towards metals for the medium term. Near-term option skews are still light, suggesting traders might not be fully pricing in the chance for abnormal intraday moves. Adjusting risk exposure while markets remain headline-sensitive could be advisable.
As the situation unfolds—both in the Middle East and among central bankers—the key is alertness to cross-market signals. Though the silver market tends to respond quickly, broader positioning often lags.
