Silver surged in the first quarter and then pulled back; a mild increase may continue in the second quarter.

The likelihood of a macro-level positive scenario is relatively high, but it still needs to be discussed on a case-by-case basis. For example, if the US-Iran situation escalates, causing crude oil prices to continue surging and leading to stagflation, the market may price in gold’s anti-inflation and safe-haven value, thereby driving silver as well. However, weakness in industrial demand would drag on silver, limiting its upward potential or causing a certain degree of pullback. If the Middle East situation does not cause stagflation and the Federal Reserve enters a rate-hiking cycle to avert inflation risks, silver will remain under pressure. On the other hand, if US-Iran relations ease and the Strait of Hormuz resumes normal navigation, this could cause crude oil prices to fall sharply, and the market might price in a Fed rate cut within the year, enabling silver prices to recover upwards. Overall, looking ahead to the second quarter, since there is a possibility of a breakthrough in the Middle East situation, the narrative of Fed rate hikes this year may be disproved. Coupled with differentiated regional markets but an overall unresolved supply-demand deficit, silver prices have a chance to continue rising moderately.