Silver (XAG/USD) experienced a notable decline, trading near $74.35 during the early European session on Monday, marking a drop of almost 2% from previous levels [1]. The price clawed back half of its early losses but remains under pressure due to a sharp recovery in oil prices, which followed failed negotiations between the United States and Iran over the weekend in Pakistan [1]. According to US President Donald Trump, Tehran refused to abandon its nuclear ambitions, prompting him to instruct the US Navy to blockade maritime traffic entering and exiting Iranian ports [1]. Trump also stated in a Fox Business interview that US gas prices could remain at current levels or higher through the November elections [1].
The resurgence in oil prices has de-anchored inflation expectations, leading traders to anticipate potential interest rate hikes by the Federal Reserve in the near term—a scenario that typically reduces demand for non-yielding assets like silver [1]. In late March, traders were pricing in two Fed rate hikes for the year, but these expectations were previously scaled back following the announcement of a two-week ceasefire between the US and Iran [1].
From a technical perspective, XAG/USD is trading close to the 20-day exponential moving average (EMA) at $75.05, with the 14-day Relative Strength Index struggling to rise above the 50.00 mark, suggesting continued selling pressure on recovery attempts [1]. Initial support is identified near $73.74, while a daily close above the 20-day EMA could ease the bearish tone and pave the way for a rebound toward the April 2 high of $81.13 [1].
No forward-looking analyst opinions beyond the technical analysis were provided in the article. The market reaction is characterized by a neutral near-term bias, with silver facing resistance to recovery amid ongoing geopolitical and inflation concerns [1].
CONCLUSION
Silver prices remain subdued near $74.35, pressured by revived inflation fears and expectations of a hawkish Federal Reserve following failed US-Iran talks and rising oil prices. Technical indicators suggest continued selling pressure unless a decisive move above the 20-day EMA occurs. The market is likely to remain cautious, with silver's recovery attempts facing resistance amid persistent geopolitical and inflationary risks.