Silver prices (XAG/USD) extended their recovery for the third consecutive trading day on Wednesday, rising over 2% to trade around $73.00 during the European session [1]. The rally was driven by optimism surrounding increased efforts from US President Donald Trump to broker a ceasefire in the Middle East. According to Reuters reports cited in the article, President Trump has proposed a month-long ceasefire with Iran, including a 15-point settlement plan that restricts Iran from building nuclear weapons and prohibits uranium enrichment on Iranian territory [1]. These diplomatic moves have raised hopes that energy shipments through the Strait of Hormuz will normalize, potentially reducing supply risks and weighing on oil prices. This scenario could prompt traders to trim hawkish expectations for global central banks, which has implications for interest rate policy [1].
Despite the recent gains, silver had been underperforming in previous weeks due to surging energy prices, which led traders to reduce bets on interest rate cuts by global central banks for the remainder of the year. Higher interest rates or an extended pause are generally negative for non-yielding assets like silver [1]. Meanwhile, the US Dollar traded slightly higher as Iran continued to dismiss claims from President Trump regarding its involvement in direct talks with the US [1].
From a technical perspective, XAG/USD is trading higher at around $73.10, but the near-term bias remains bearish as the price is well below the 20-day Exponential Moving Average (EMA) near $78.30. The recent sequence of lower highs persists after the $93.80 peak. The 14-day Relative Strength Index (RSI) has recovered to near 41, signaling a pause in downside momentum, but the overall downside bias is intact [1]. Immediate support is at $72.80, with further downside targets at $67.90 and $64.01 if weakness continues. On the upside, resistance is seen at $75.30 and $79.30, with a daily close above these levels needed to neutralize the bearish tone and refocus attention on the $83.00 area [1].
CONCLUSION
Silver prices have rebounded above $74, supported by optimism over a potential Middle East ceasefire and easing supply risks. However, technical indicators suggest the bearish bias remains intact unless resistance levels are breached. The market is cautiously optimistic, but further gains depend on geopolitical developments and central bank policy shifts.