Both gold (XAU/USD) and silver (XAG/USD) prices rallied during the Asian trading session on Tuesday following reports that US President Donald Trump is prepared to end the US military campaign against Iran, even if the Strait of Hormuz remains largely closed. This development was reported by the Wall Street Journal and has triggered notable market reactions, including a 3% jump in silver prices to near $73.00 [1], and gold reaching a one-and-a-half-week high, though struggling to find acceptance above the $4,600 mark [2].
The easing of geopolitical tensions has led to a corrective pullback in crude oil prices, which in turn has reduced inflation concerns and kept US Treasury bond yields subdued. This environment prompted profit-taking in the US Dollar and benefited both gold and silver as safe-haven assets [1][2]. However, despite the positive price action, technical analysis for both metals suggests a cautiously bearish near-term bias. Silver remains below its 20-day Exponential Moving Average (EMA) at $75.49, with resistance at this level and support at $66.70 and $61.00 [1]. Gold trades beneath its 100-day Simple Moving Average (SMA), with the broader uptrend intact but under short-term pressure, and the Relative Strength Index (RSI) for both metals indicates only a pause in bearish momentum rather than a full reversal [1][2].
Market participants are also monitoring ongoing developments, as Iran has signaled reluctance to engage in direct negotiations with the US, and the US continues to deploy additional troops and assets to the region. This adds uncertainty and dampens hopes for a quick de-escalation, potentially supporting crude oil prices and keeping inflation risks in play [2]. Traders have fully priced out further US Federal Reserve rate cuts and are increasingly betting on a rate hike by year-end, which could cap gains for non-yielding assets like gold [2].
Looking ahead, traders are focused on upcoming US economic data releases, including JOLTS Job Openings and the Conference Board's Consumer Confidence Index, as well as speeches by influential FOMC members. These factors, alongside ongoing geopolitical developments, are expected to drive volatility in both gold and silver markets [2].
CONCLUSION
Gold and silver prices have surged on signs of potential de-escalation between the US and Iran, but technical and fundamental factors suggest caution as near-term bearish momentum persists. Ongoing geopolitical uncertainties and expectations for hawkish central banks may limit further upside, with market participants closely watching upcoming US economic data and Fed commentary for additional direction.