Silver (XAG/USD) and the British Pound (GBP/USD) both experienced significant gains on Wednesday following renewed optimism about a potential US-Iran peace deal, as reported by Axios. This optimism triggered a sharp decline in the US Dollar (USD) and Oil prices, with Silver trading around $77, up over 5.50% on the day [1], and GBP/USD rising by over 0.59% to 1.3614 after hitting a daily high of 1.3643 [2].
The Axios report indicated that Washington and Tehran are moving closer to a potential agreement aimed at ending the war and establishing a framework for detailed nuclear negotiations. Specifically, the US and Iran are discussing a 14-point, one-page memorandum of understanding (MOU) that, if signed, would end the war, initiate a 30-day negotiation period, open the Strait of Hormuz, and limit Iran’s nuclear program. Additionally, the US Treasury would unfreeze Tehran’s funds [2].
The sharp decline in crude Oil, with WTI dropping over 7% on the news, helped ease immediate inflation concerns and pushed US Treasury yields lower, providing further support to non-yielding assets like Silver [1][2]. The US Dollar Index (DXY) fell 0.49% to 98.00 [2]. Despite strong US jobs data, with the ADP National Employment Change posting its largest increase in 15 months at 109,000 (exceeding forecasts of 99,000 and March’s 61,000), the Dollar remained under pressure due to falling Oil prices and peace deal hopes [2].
Technical analysis for Silver shows the price is capped below the 50-day and 100-day Simple Moving Averages (SMA), with resistance at $77 and $80, and support at $70-$71 and $63. The Relative Strength Index is near 53, and the MACD is fractionally positive, but the Average Directional Index at 12 suggests a weak trend and possible consolidation [1]. For GBP/USD, the pair holds a constructive near-term bias above the SMA cluster at 1.3415, with resistance from a downwards-sloping line at 1.3869 [2].
Forward-looking statements include ongoing uncertainty about whether the US and Iran can reach a final agreement, which keeps markets on edge and limits further upside in Silver [1]. St. Louis Fed's Alberto Musalem noted that risks to monetary policy have shifted towards higher inflation, suggesting rates may remain stable for some time [2]. In the UK, political turmoil and upcoming local election results could impact market sentiment [2].
CONCLUSION
Both Silver and the British Pound rallied sharply on renewed hopes for a US-Iran peace deal, which weakened the US Dollar and Oil prices. Despite strong US jobs data, market sentiment remains focused on geopolitical developments and potential Federal Reserve policy shifts. Ongoing uncertainty about the finalization of the US-Iran agreement continues to keep markets cautious.