Silver (XAG/USD) traded around $59.80 on Tuesday, marking a 2.81% increase for the day, as the precious metal extended its rebound from a Monday low of $56.57 [1]. The rally was supported by renewed demand for precious metals, driven by improved market sentiment following comments from US Treasury Secretary Scott Bessent. Bessent stated that an agreement with Iran to reopen the Strait of Hormuz could be reached as soon as Tuesday or Wednesday, and predicted that energy prices would 'settle back down' if a deal is finalized [1]. In response, West Texas Intermediate (WTI) US Oil dropped more than 3%, reflecting investor expectations of a normalization in global energy supplies [1].
The decline in oil prices is seen as potentially easing inflationary pressures in the US, which could reduce the need for the Federal Reserve to tighten monetary policy. Lower interest rate expectations typically weigh on the US Dollar, providing additional support for non-yielding assets like silver [1]. Market participants continue to adjust their expectations for the Fed, while ongoing diplomatic developments between the US and Iran remain a key focus. However, the outlook is clouded by conflicting statements: US President Donald Trump claims talks are underway and has described his latest proposal as Iran's 'last chance' for an agreement, while Iranian officials deny any negotiations are taking place [1].
Technical analysis shows XAG/USD trading at $59.74, maintaining a bullish near-term bias above the 100-period SMA ($58.11) and 200-period SMA ($58.16). The former downtrend resistance line, now support at $58.62, reinforces the constructive structure. The Relative Strength Index (RSI) at 74.48 signals overbought conditions, suggesting that while further gains may slow, an immediate reversal is unlikely [1]. On the downside, support levels are identified at $58.62, $58.16, and $58.11, with a stronger floor near $57.00. Immediate resistance is seen at $60.09, with a higher cap at $60.94; a sustained break above these levels could open the way for further upside in the short term [1].
CONCLUSION
Silver's surge near $60 is driven by falling oil prices and optimism around US-Iran diplomatic progress, with technical indicators supporting a bullish outlook. However, conflicting statements from US and Iranian officials add uncertainty to the market's direction. The combination of easing inflation expectations and strong technical support suggests continued strength for silver, barring any abrupt changes in geopolitical developments.