Silver advances amid Hormuz reopening hopes

Silver (XAG/USD) experienced a moderate increase on Tuesday, trading near $59.50 per troy ounce, up 2% for the day, but it remains within a narrow range. The decline in geopolitical tensions has reduced safe-haven demand, while a softer U.S. labor market dampens downside pressure and maintains uncertainty around the Federal Reserve's outlook.

Reports suggest that an announcement regarding the reopening of the Strait of Hormuz might be announced soon, although they have not been officially confirmed. This potential reopening could impact silver demand by removing defensive support and boosting industrial activity, which accounts for roughly half of silver demand. Meanwhile, softer labor demand indicates a possible end to the Federal Reserve's tightening cycle, which could weaken the US Dollar and favor precious metals.

The ADP Employment Change is expected to slow in July, contributing to the positive sentiment. On the technical side, XAG/USD is trading at $59.40, above both the 20-period Simple Moving Average ($58.37) and the 100-period SMA ($57.93), indicating a bullish bias. The Relative Strength Index (RSI) stands at 61, suggesting firm upside momentum but not yet in overbought territory.

Resistance is initially found at $59.49, followed by the significant level of $60.00, while support is located at $59.14, with $58.99, the 20-period SMA ($58.37), and the 100-period SMA ($57.93) providing further support in case of deeper pullbacks.