Silver Price Forecast: XAG/USD jumps above $73 as Trump shows readiness for peace with Iran
- Silver price attracts significant bids as US President Trump calls for peace with Iran despite the Hormuz remaining closed.
- Trump said a forceful reopening of Hormuz would mean extending the military mission.
- Traders might pare hawkish central banks' bets if Middle East conflicts get resolved.
Silver price (XAG/USD) jumps 3% to near $73.00 in the Asian trading session on Tuesday. The white metal strengthens after a report from the Wall Street Journal (WSJ) showed that United States (US) President Donald Trump is ready for peace with Iran even without the reopening of the Strait of Hormuz, the gateway of 20% of global energy supply.
The WSJ reported that US President Trump told aides he is willing to end the US military campaign against Iran even if the Strait of Hormuz remains largely closed. The report also stated that administration officials assessed that forcing the waterway back open would mean extending the military mission beyond their timeline of four to six weeks.
Theoretically, signs of easing geopolitical tensions ease demand for safe-haven assets, such as Silver; however, the white metal is outperforming as hopes of a decline in the Oil price due to the Middle East truce would ease accelerated global inflation expectations.
The precious metal underperformed in the last few weeks as rallying energy prices due to Middle East conflicts-led supply disruption had de-anchored inflation projections on the upside, a scenario that discourages central banks from loosening monetary conditions and diminishes the demand for non-yielding assets, such as Silver.
Silver technical analysis
XAG/USD rises to near $73 in the Asian trade on Tuesday. However, the near-term bias remains mildly bearish as price is still below the 20-day Exponential Moving Average (EMA), which now caps at $75.49 and tracks a maturing downswing from the mid-$80s. The sequence of lower daily highs confirms selling pressure, while 14-day Relative Strength Index (RSI) recovers slightly above 40.00, indicating a bearish momentum pause with the downside bias remaining intact.
Initial resistance emerges at the 20-day EMA near $75.50, and a daily close above this level would be needed to ease immediate downside pressure and expose the mid-$80s region as a secondary barrier. On the downside, minor support sits near the March 26 low at $66.70, with a break lower opening the way toward the March 23 low around $61.00 as the next bearish objective.
(The technical analysis of this story was written with the help of an AI tool.)
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
Author
Sagar Dua
FXStreet
Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.
