Silver (XAG/USD) declined below the $61.00 mark, reversing some of last week’s gains as market sentiment turned cautious amid renewed geopolitical tensions and shifting expectations for US monetary policy. At the time of writing, XAG/USD was trading at $61.16, having pulled back from Monday’s peak near $63.30. The market’s focus shifted from the fading prospects of further Federal Reserve rate hikes to concerns over the US-Iran peace deal, following verbal escalations between US President Donald Trump and Iran’s Foreign Minister Abbas Araghchi. Araghchi warned that negotiations on a final deal would not begin if threats continued, while Trump asserted that the US would either reach an agreement or “finish the job” in Iran, clouding hopes for a swift resolution to the conflict [1].
Additionally, reports of an attack on an oil tanker in the Strait of Hormuz heightened investor concerns, further dampening enthusiasm for precious metals despite the lessening likelihood of immediate Fed rate hikes. Technical indicators for XAG/USD have turned bearish, with the Relative Strength Index (14) on the four-hour chart hovering near the 50 midline and the MACD dipping below zero, signaling waning bullish momentum. A decisive break below the $60.40 session low could expose the 2026 lows between $55.70 and $56.70, while resistance remains at Monday’s high of $63.33, with further upside targets at $67.15 and $71.50 if bullish momentum returns [1].
The market reaction reflects a shift in focus from monetary policy to geopolitical risks, with silver’s safe-haven appeal being tested by the current uncertainty. The technical outlook suggests increased downside risk in the near term, unless geopolitical tensions ease or monetary policy expectations shift again [1].
CONCLUSION
Silver prices have come under pressure, dropping below $61.00 as geopolitical tensions between the US and Iran overshadow the positive impact of reduced Fed rate hike expectations. Technical indicators point to a bearish outlook, with further downside possible if current market sentiment persists. Investors remain cautious, closely monitoring developments in both the geopolitical and monetary policy arenas.