Silver is under influence of lower crude prices and weaker dollar

Silver is currently hovering around $59.800, having climbed 2% from eight-month lows. The rally was driven by a short-term pause in the Middle East strikes. Eased geopolitical tensions led to a sudden drop in crude prices, taking away some inflationary pressure and allowing precious metals to bounce off their local bottoms.

Lower oil costs have also triggered a decline in US Treasury yields and weakened the dollar itself. As a result, silver has once again become an attractive investment option for holders of other currencies. However, the market is well aware that the present lull is temporary. Traders remain highly sensitive to further diplomatic developments, and the current rally looks more like a correction than a full‑fledged trend reversal.

The Federal Reserve (Fed) meeting on Wednesday promises to be the key event of the week. Market expectations hint at monetary tightening: the probability of a rate hike as early as July is estimated at 36%, while it rises above 79% for September.

Thursday’s jobless data and Core Personal Consumption Expenditures (PCE) report, combined with Friday’s Employment Cost Index (ECI), will complete the picture. If the latter comes in strong and the Fed maintains its hawkish posture, the likelihood of future hikes will surge, lifting the dollar. Otherwise, silver buyers could remain active and defend current levels.

The technical setup shows that the pressure is still acute. The recent rebound from the local low of $54.756 was merely an unsteady, corrective move. The price appears unable to consolidate above the 20-day exponential moving average (EMA20) at $59.358—a clear sign that bears are still running the show.

Consider the following trading strategy:

Sell silver from $59.300, with Take profit at $55.860 and Stop loss at $62.100.

The forecast remains pertinent between July 27 and August 3, 2026.