Silver Rises as Oil Falls US-Iran Ceasefire ExtensionUP

Key Moments

Market Overview

Silver prices (XAG/USD) are climbing, with the metal trading 2.3% higher near $78.50 during early European trading on Wednesday. The move comes as oil prices pull back in the wake of United States (US) President Donald Trump’s decision to prolong a ceasefire with Iran before the scheduled end of a two-week truce on April 22.

West Texas Intermediate (WTI) Oil is down 2.3% at about $87.60 at the time of writing, retracing from a sharp rise to near $91.60 on Tuesday.

Inverse Link Between Silver and Oil

Since the onset of the conflict between the US and Iran, Silver and oil prices have shown an inverse relationship. Elevated energy prices have contributed to a pronounced increase in global inflation expectations. This environment has discouraged central banks from cutting interest rates, a backdrop generally seen as negative for non-yielding assets such as Silver.

US-Iran Developments and Policy Signals

Late Tuesday, President Trump stated in a Truth.Social post that the US military would pause attacks on Iran until Washington receives a unified proposal from Tehran. He added that the US blockade of Iranian sea ports would remain in place.

In the US policy landscape, Kevin Warsh, nominated by President Trump as the new Federal Reserve (Fed) chairman, told the Senate Banking Committee that fundamental policy changes are needed and signaled a preference for a smaller Fed balance sheet.

Dollar Softness Supports Silver

A mild decline in the US Dollar (USD), coinciding with the ceasefire extension, is also aiding Silver’s upside. From a technical perspective, a weaker USD often improves the risk-reward profile of USD-denominated assets like Silver.

At press time, the US Dollar Index (DXY) – which tracks the Greenback against six major currencies – is trading 0.13% lower near 98.27.

Technical Picture for XAG/USD

XAG/USD is trading around $78.50, reflecting a neutral short-term stance within an Ascending Triangle formation on the daily chart. The pair has been oscillating around the 20-period Exponential Moving Average (EMA) near $77.00 for more than a month, underscoring a sideways market structure.

The Relative Strength Index (RSI) remains confined between 40.00 and 60.00, pointing to hesitation among market participants.

A sustained move above the horizontal resistance around $81.33 would likely signal a stronger bullish extension, targeting the March 12 peak at $87.45. On the downside, the rising trend line near $78.34 is the first notable support, with the 20-period EMA at $77.00 offering an additional cushion. A daily close beneath $77.00 would undermine the current bullish structure and open the door toward the psychological $70 region.

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

(This story was corrected on April 22 at 07:51 GMT to say in the third bullet that Kevin Warsh is the Fed Chair designate, not the Fed Chair.)

Silver Market Fundamentals – FAQs

Why do investors allocate to Silver?

Silver is a widely traded precious metal that has historically served as both a store of value and a medium of exchange. While it tends to be less prominent than Gold, investors may turn to Silver to diversify portfolios, to gain exposure to its intrinsic value, or to potentially hedge against periods of elevated inflation. Market participants can gain exposure through physical holdings – such as coins and bars – or via Exchange Traded Funds that mirror Silver’s price performance in international markets.

What drives Silver price movements?

Silver prices can respond to a broad set of drivers. Episodes of geopolitical stress or concerns over a pronounced economic downturn can lift Silver due to its safe-haven characteristics, albeit typically to a lesser degree than Gold. As a yieldless asset, Silver tends to react positively when interest rates move lower. Because Silver is priced in US Dollars (XAG/USD), the currency’s trajectory also matters: a strong USD tends to restrain Silver, while a weaker USD can provide upside impetus. Other inputs include investment demand, mining output – Silver is significantly more plentiful than Gold – and recycling flows.

How important is industrial demand for Silver?

Silver has extensive industrial applications, particularly in electronics and solar energy, supported by its very high electrical conductivity, which exceeds that of Copper and Gold. An upswing in industrial usage can underpin higher prices, whereas a slowdown in demand can exert downward pressure. Economic developments in the US, China, and India can influence these dynamics: industrial activity in the US and especially China relies on Silver in various processes, while in India, consumer demand for Silver jewelry is also an important factor in price formation.

How does Gold affect Silver prices?

Silver often tracks the direction of Gold. When Gold prices advance, Silver frequently moves higher as well, reflecting their shared safe-haven profile. The Gold/Silver ratio – indicating how many ounces of Silver are equivalent in value to one ounce of Gold – is sometimes used to gauge relative value between the two metals. Some investors may interpret a high ratio as a sign that Silver is undervalued or Gold is overvalued, while a low ratio can be seen as implying the opposite.