Silver (XAG/USD) failed to break through resistance at the $79.00 area earlier on Monday, but remains moderately bid, trading in the mid-$77.00s at $77.51 at the time of writing [1]. The market is being influenced by hopes of a US-Iran peace deal, which are weighing on the US Dollar and supporting precious metals, including silver [1]. However, there are contradictory signals from US President Donald Trump, who on Saturday suggested a deal was close, but on Sunday stated that the US would maintain the blockade of the Strait of Hormuz until an agreement is reached and advised negotiators 'not to rush into a deal' [1].
Trading volumes are subdued due to the Memorial Day bank holiday in the US and UK, contributing to a calm market environment [1]. Technical analysis indicates a mildly bullish stance for silver, with price action forming an inverted Head & Shoulders pattern and key resistance at the $79.00 area [1]. Momentum indicators such as the Relative Strength Index (RSI) in the mid-50s and the Moving Average Convergence Divergence (MACD) in positive territory suggest that any dips could remain shallow as long as support levels hold [1].
The main resistance zone is between the May 19 high at $78.90 and the 38.2% Fibonacci retracement of the mid-May bearish cycle at $79.20. A break above this area could shift focus to the $80.00 psychological level and a previous support zone at $83.00, which is also the 61.8% Fibonacci retracement of the same cycle [1]. On the downside, support is seen at the May 21 highs around $77.00 and Friday's low near $75.00, with key support at the May 19 low near $73.10 [1].
CONCLUSION
Silver prices are maintaining a mildly bullish stance below $78, supported by hopes for a US-Iran peace deal and technical indicators. Market activity remains subdued due to the holiday, with key resistance and support levels clearly defined. The outlook hinges on geopolitical developments and whether silver can break above the $79.00 resistance area.