US-Iran diplomacy keeps Silver trading flat

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Silver slips 0.41% to $57.23 today

Highlights

Silver's safe-haven appeal has diminished as easing Middle East tensions and US-Iran diplomatic progress reduce geopolitical risk premiums.
Expectations of further Federal Reserve rate hikes, driven by persistent US inflation, have strengthened the dollar and caused investors to shift from silver to higher-yielding assets.
Technical signals are strongly bearish with silver trading below major averages, suggesting a likely range-bound move between $52.18 and $62.28 with high downside risk.

Safe-haven demand wanes as geopolitical risks and Fed outlook shift

A broad sell-off in global commodity markets impacted precious metals, with silver affected after a reduction in geopolitical risk premiums following progress in US-Iran negotiations and an easing of Middle East tensions, as reported by Tradingkey. These developments have shifted safe-haven demand away from silver, decreasing its defensive appeal. Additionally, according to Eciks, heightened Federal Reserve rate hike expectations linked to persistent US inflation have driven a stronger US dollar, further pressuring silver as investors rotate into higher-yielding assets.

Sustained oversold momentum as sellers dominate below technical levels

On the H4 timeframe, XAG is positioned below the 20-period moving average at $59.09 and the 50-period moving average at $62.28. On the daily chart, the price remains below the 200-period moving average at $76.54, while the Ichimoku Kijun level at $59.4 is identified as immediate resistance. Momentum indicators reinforce a weak outlook: the Moving Average Convergence Divergence (MACD) issues a strong sell signal, the Average Directional Index (ADX) confirms selling strength, and the Relative Strength Index (RSI) is deep in oversold territory at 26.75. The Commodity Channel Index (CCI) and Bull/Bear Power also signal a seller-dominated environment, with oversold conditions present. The Stochastic RSI and Awesome Oscillator are neutral, indicating divergence among oscillators as some signals lose downside conviction.

Sideways action anticipated as upside remains unlikely and risks mount

Over the next two to three sessions, XAG is expected to remain within a volatility band of $52.18 to $62.28. The baseline scenario sees the price consolidating sideways between these support and resistance levels. If there is a bullish breakout above $59.4, further gains may follow; conversely, a move below $52.18 could trigger additional declines. The probability of a substantial upside move remains very low, while further downside risk is comparatively high in the near term.

Anton Kharitonov, expert at Traders Union, sees sustained pressure on silver as both technicals and fundamentals align to the downside. He notes that easing geopolitical risks and firmer Fed rate hike expectations are reducing safe-haven demand and lifting the dollar, pushing XAG below key averages and into oversold territory. The analyst remains cautious, expecting sideways movement unless $59.4 is broken decisively. "With sellers in control and resistance holding, I remain defensive on silver until we see a confirmed breakout or reversal in macro sentiment."

Earlier, analysts noted that silver remained under sustained bearish pressure, driven by a strong US dollar and a shift away from safe-haven assets amid persistent hawkish signals from the Federal Reserve. The current market action reinforces this bearish outlook, with traders closely monitoring the $52.18 support level as a decisive trigger for potential further declines in the near term.

Source of Data: XAG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

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