Silver Price Forecasts: XAG/USD reaches $59.00 amid cautious Iran peace hopes
- Silver appreciates to levels above $59.00 after bouncing from Monday's low of $56.57.
- Precious metals are picking up as investors cling to hopes of a peace deal on Iran.
- XAG/USD is trading halfway through the last four weeks' range.
Silver (XAG/USD) accelerates its recovery on Tuesday, reaching session highs above $59.00 at the time of writing, after bouncing from the $56.50 area on Monday. Investors’ hopes of a negotiated end to Iran’s war are providing a mild appetite for risk, and buoying precious metals, although the US Dollar Index (USD) has picked up from lows, which might keep a lid on Silver’s rally.
US President Donald Trump affirmed on Monday that this is the “last chance” for Iran to sign a good peace deal with the United States, but Tehran has denied any talks with the US or plans to hold them. Meanwhile, sea traffic through the Hormuz and Bab el-Mandeb Straits remains at very low levels, and reports of an attack on a cargo vessel off the coast of Oman complicate matters further.
Technical Analysis: Silver appreciates within range
XAG/USD trades at $59.01, maintaining a mildly bullish near-term bias with momentum indicators on the 4-hour chart turning positive. The Relative Strength Index (14) is hovering near 58, and the Moving Average Convergence Divergence (MACD) line has crossed above the zero line, suggesting that buyers are taking control.
Price action, however, remains within the mid-ranges of the last four weeks' horizontal channel. Bulls are likely to meet significant resistance at the $59.30 area (July 29, 30 highs) and at the $60.75-$60.90 area (July 10, 22 highs) ahead of the key resistance at the July 6 high of 63.28
On the downside, immediate support is at the $56.50 area, which capped bears last week. A bearish reaction below that level would expose the key support at the mid-July lows of $54.77.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
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
Guillermo Alcala
FXStreet
Graduated in Communication Sciences at the Universidad del Pais Vasco and Universiteit van Amsterdam, Guillermo has been working as financial news editor and copywriter in diverse Forex-related firms, like FXStreet and Kantox.
