Silver futures for July delivery opened at $69.95 per ounce on Tuesday, slightly below Monday’s close but still representing the highest opening level in more than a week.

Prices strengthened modestly during early trading, rising above $70.50 per ounce as investors balanced improving geopolitical conditions with uncertainty surrounding monetary policy.

The move follows the announcement of a framework agreement between the United States and Iran aimed at ending months of conflict and reopening the Strait of Hormuz, one of the world’s most important energy shipping routes.

Peace Deal Supports Precious Metals

The tentative agreement initially boosted both gold and silver prices as investors assessed the broader implications for inflation, energy markets, and economic growth.

Although tensions have eased significantly, markets remain cautious because the final agreement has not yet been formally signed and key implementation details remain unclear.

Questions surrounding shipping security, sanctions relief, and the timeline for reopening the Strait of Hormuz have encouraged many investors to remain defensive until more information becomes available.

Federal Reserve Takes Center Stage

Attention is now shifting toward the Federal Reserve’s policy meeting.

The central bank begins a two-day meeting this week as investors attempt to determine whether policymakers will maintain current interest rates or signal a more hawkish stance later this year.

Interest rates remain one of the most important drivers of precious metal prices because silver, like gold, does not generate interest income.

Higher interest rates generally increase the attractiveness of bonds, savings accounts, and other yield-producing assets, often creating headwinds for precious metals.

Silver’s Recent Performance

Silver’s performance has been highly volatile over recent months.

Current prices remain approximately 2.5% higher than one week ago and roughly 93% above levels seen a year earlier.

However, prices are still more than 13% below where they traded a month ago following a sharp correction across commodity markets.

Earlier this year, silver experienced dramatic swings, surging above $110 per ounce before retreating sharply within weeks as investors reassessed inflation expectations and economic risks.

Long-Term Outlook Remains Bullish

Many analysts continue to maintain a positive long-term outlook for silver.

Several major financial institutions have projected further gains over the coming years, citing growing industrial demand, renewable energy applications, artificial intelligence infrastructure expansion, and continued investor interest in precious metals.

Some forecasts suggest silver could surpass $80 per ounce within the next few years, with more optimistic projections targeting $100 per ounce by the end of the decade.

Volatility Likely to Continue

Despite favorable long-term trends, investors should expect continued volatility.

Unlike gold, silver derives a significant portion of its demand from industrial uses, making prices sensitive to economic growth expectations, manufacturing activity, and technological investment cycles.

Changes in interest rate expectations, geopolitical developments, and shifts in investor sentiment can also produce large price swings over relatively short periods.

Outlook

Silver remains supported by strong long-term demand drivers and lingering inflation concerns, but near-term direction will likely depend on signals from the Federal Reserve and further developments surrounding the U.S.-Iran agreement.

A more hawkish Fed could pressure prices by strengthening the appeal of interest-bearing assets, while signs of easing monetary policy could provide additional support for precious metals.

For now, markets appear content to wait for greater clarity before establishing a stronger directional trend.