Silver prices (XAG/USD) jumped sharply by over 2% to trade near $60.00 during the Asian trading session on Monday, marking a strong start to the week. This surge was driven by renewed hopes for diplomacy between the United States and Iran, following a pause in military aggression between the two countries. US ambassador to the United Nations, Mike Waltz, stated on 'FoxNews Sunday' that President Donald Trump had decided to pause US attacks to allow more time for diplomatic efforts, as reported by Reuters [1].
The pause in hostilities led to a significant drop in oil prices, with WTI Oil trading 5.6% lower at around $84.00. The sharp decline in oil prices has eased concerns about prolonged elevated inflation expectations, which in turn has reduced fears of higher interest rates by global central banks in the near term [1]. Previously, silver had underperformed due to the onset of the Middle East conflict, which had boosted oil prices and inflation fears. Higher interest rates typically diminish the appeal of non-yielding assets like silver [1].
From a technical perspective, XAG/USD is trading above the 20-day Exponential Moving Average (EMA) at $59.35, with the 14-day Relative Strength Index (RSI) moving toward the mid-40s, indicating modestly improving momentum. A decisive daily close above the 20-day EMA would ease immediate downside pressure and potentially open the way for a deeper recovery. The July 17 low at $54.77 is identified as a key support level [1].
Looking ahead, investors are expected to closely monitor the Federal Reserve’s monetary policy announcement scheduled for Wednesday, where the central bank is anticipated to leave interest rates unchanged [1].
CONCLUSION
Silver prices have rebounded strongly, supported by diplomatic developments between the US and Iran and a sharp drop in oil prices, which has eased inflation and interest rate concerns. Technical indicators suggest improving momentum, and market participants are now focused on the upcoming Federal Reserve policy announcement. The overall market sentiment for silver is positive in the near term, with potential for further gains if current conditions persist.