Silver Price Forecast: XAG/USD rises to near $75.70 on US-Iran deal hopes
- Silver price rises to near $75.75 amid optimism on US-Iran permanent peace deal.
- US President Trump said earlier in the day that Iran wants a deal badly.
- Washington wants Iran to destroy its nuclear dust for a deal.
Silver price (XAG/USD) is up 0.5% to near $75.75 during the European trading session on Monday. The white metal trades higher amid hopes that the United States (US) and Iran will reach a permanent peace deal soon.
In the late Asian trade, US President Donald Trump said through a post on Truth Social that Iran wants a deal badly, while warning that the option of military action remains on the table.
Over the weekend, US President Trump said in an interview with Fox Business that the terms of the deal with Iran have been revised, adding that destroying Tehran’s nuclear dust and the reopening of the Strait of Hormuz remain key demands.
Meanwhile, the oil price has rebounded, following the exchange of attacks between Israel and Lebanon. The Silver and oil prices have carried a negative relationship since the onset of the war, as elevated energy prices have prompted inflationary pressures globally and forced traders to price out dovish Federal Reserve (Fed) bets.
Theoretically, the scenario of vanishing dovish Fed bets bodes poorly for non-yielding assets, such as Silver.
Going forward, investors will focus on the US Nonfarm Payrolls (NFP) data for May, which will be released on Friday.
Silver technical analysis
XAG/USD trades higher at around $75.75, but is broadly sideways from the last two weeks in the range between $71.79 and $78.83. The white metal maintains a bearish near-term tone as it holds beneath the 20-day exponential moving average (EMA) at $76.92. The downside bias is reinforced by the Relative Strength Index (RSI) hovering just below the neutral 50 mark near 47, which suggests subdued bullish momentum after the recent pullback from higher levels.
On the topside, the May 25 high at $78.83 is the first hurdle bulls need to clear to ease immediate downside pressure and open the way for a more sustained recovery towards the May 15 high at $83.88. On the downside, the asset could slide to the April 7 low at $68.28 if it drops below the May 28 low at $71.79. The major support level for the Silver price is the March 23 low at $61.01.
(The technical analysis of this story was written with the help of an AI tool.)
Silver FAQs
Why do people invest in Silver?
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.
Which factors influence Silver prices?
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.
How does industrial demand affect Silver 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.
How do Silver prices react to Gold’s moves?
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.
