Silver (XAG/USD) traded around $65.90 on Monday, marking a 1.69% increase for the day and ending a three-day losing streak, as investors responded to diplomatic progress between the United States and Iran [1]. The price rise was supported by announcements from Qatar and Pakistan that Washington and Tehran have agreed to a formal roadmap aimed at reaching a final peace agreement within the next 60 days [1]. This development contributed to lower oil prices and eased concerns about an energy-driven inflation surge, which had previously fueled market volatility [1].
Iranian Foreign Minister Abbas Araqchi confirmed several breakthroughs in the negotiations, including waivers for oil and petrochemical exports, the release of part of Iran’s frozen financial assets, and the initiation of a broader economic reconstruction program [1]. Despite these positive diplomatic signals, geopolitical risks remain, as US President Donald Trump warned that the United States could carry out direct strikes against Iran if Tehran-backed groups launch further attacks on Israel [1]. This ongoing uncertainty continues to encourage caution among investors [1].
On the monetary policy front, silver’s gains may be limited by a more hawkish stance from the Federal Reserve. Last week, the Fed left interest rates unchanged but signaled a more aggressive outlook, with nine of nineteen Federal Open Market Committee members now expecting at least one rate hike this year [1]. This has led markets to consider the possibility of a rate increase as early as September, which, along with higher US Treasury yields and a resilient US Dollar, could reduce the appeal of non-yielding assets like silver [1].
Overall, while diplomatic progress between the US and Iran has provided a boost to silver prices, ongoing geopolitical risks and shifting Fed policy expectations are likely to keep gains in check [1].
CONCLUSION
Silver prices have rebounded on news of US-Iran diplomatic progress, but upside remains limited due to persistent geopolitical risks and a more hawkish Federal Reserve outlook. Investors are likely to remain cautious as they weigh these competing factors in the coming weeks.