Silver Rises Above $73 as Markets Eye US‑Iran De‑escalation

Key Moments

Silver Rallies on Easing Geopolitical Risk

Silver prices (XAG/USD) advance sharply in the Asian session on Tuesday, rising 3% to trade close to $73.00. The move comes after a Wall Street Journal (WSJ) report indicated that United States President Donald Trump is prepared to pursue peace with Iran even if the Strait of Hormuz – a key channel for roughly 20% of global energy flows – stays largely shut.

According to the WSJ, President Trump has informed aides that he is willing to bring the US military campaign against Iran to an end without insisting on the full reopening of the waterway. The report adds that US administration officials judge that a military push to reopen Hormuz by force would entail prolonging the operation beyond their anticipated four to six week window.

Typically, signs of reduced geopolitical tension would cool demand for safe-haven assets such as silver. However, the metal is benefiting as investors position for the possibility that a truce in the Middle East could take pressure off Oil prices, which in turn could temper heightened global inflation expectations.

In previous weeks, silver had lagged as elevated energy prices linked to Middle East-related supply disruptions pushed inflation forecasts higher. That backdrop made it harder for central banks to consider policy easing and weighed on demand for yield-less assets like silver.

Market Implications for Central Bank Expectations

The potential for a diplomatic path between the US and Iran is prompting some traders to reassess expectations around central bank policy. If Middle East tensions ease and energy markets stabilize, participants may scale back bets on prolonged hawkish stances from central banks, a dynamic that could be more supportive for non-yielding assets, including silver.

Technical Landscape for XAG/USD

Despite the latest rebound toward $73.00, the near-term technical outlook for XAG/USD remains cautiously negative. The pair continues to trade under its 20-day Exponential Moving Average (EMA), which is currently positioned at $75.49 and reflects an ongoing downswing from the mid-$80s area.

A series of lower highs on the daily chart highlights persistent selling interest. At the same time, the 14-day Relative Strength Index (RSI) has recovered slightly above 40.00, signaling that bearish momentum has paused but not definitively reversed, with the broader downside bias still in place.

On the upside, the first technical hurdle is the 20-day EMA near $75.50. A daily close above that threshold would be required to alleviate short-term downside pressure and potentially open a path back toward the mid-$80s area as the next major resistance zone.

On the downside, initial support is seen at the March 26 low of $66.70. A decisive move below that level would clear the way toward the March 23 low around $61.00, which stands as the next key bearish objective.

(The technical analysis of this story was written with the help of an AI tool.)

Silver as an Investment Asset

Silver is a widely traded precious metal that investors use for several purposes, including portfolio diversification, preservation of value, and as a potential hedge during periods of elevated inflation. Market participants can gain exposure through physical holdings, such as coins or bars, or via financial instruments like Exchange Traded Funds that track silver prices in global markets.

Key Drivers of Silver Prices

Silver pricing is influenced by multiple macro and market forces. Periods of geopolitical uncertainty or heightened concern about economic downturns can lend support to silver due to its status as a safe-haven asset, although typically to a lesser degree than gold. As a non-yielding asset, silver is also sensitive to interest rate dynamics: lower rates tend to be supportive, while higher rates can be a headwind.

Because silver is quoted in US dollars (XAG/USD), shifts in the value of the Dollar play an important role. A stronger Dollar often restrains silver prices, while a weaker Dollar can help lift them. Beyond macro conditions, fundamentals such as investment flows, mine output – silver is more plentiful than gold – and recycling trends also shape the market.

Role of Industrial and Regional Demand

Industrial usage is a major component of silver demand. The metal is incorporated extensively in electronics and solar energy applications, among others, benefiting from its very high electrical conductivity, which surpasses that of copper and gold. Changes in industrial activity can therefore have a direct impact on prices: robust demand can push prices higher, whereas a slowdown can weigh on them.

Economic developments in the United States, China, and India are especially important. The US and China have substantial industrial bases that depend on silver in various manufacturing processes, while in India, consumer appetite for silver jewelry plays a significant role in shaping overall demand.

Interaction Between Silver and Gold Prices

Silver often moves in tandem with gold, reflecting their shared appeal as safe-haven assets. When gold prices rise, silver frequently follows, and vice versa. Investors also track the Gold/Silver ratio, which measures how many ounces of silver are needed to equal the value of one ounce of gold, as a gauge of relative pricing between the two metals.

A high Gold/Silver ratio can be interpreted by some market participants as a sign that silver is undervalued compared with gold, or that gold is overpriced. Conversely, a low ratio may suggest that gold is inexpensive relative to silver, or that silver is trading at a premium.