Silver Jumps as US-Iran Peace Deal Sends Oil Tumbling

Key Moments

Silver Surges on Oil Slide and Geopolitical Thaw

Silver prices (XAG/USD) are advancing sharply in the Asian session on Monday, climbing 4% to trade close to $70.80. The rally in the precious metal comes as oil prices retreat significantly following the reopening of the Strait of Hormuz and the confirmation of a peace agreement between the United States and Iran.

The Strait of Hormuz, described as a key channel for nearly 20% of the world’s energy flows, has been reopened, easing market concerns. This development, combined with the peace deal, has driven oil prices markedly lower.

In recent months, elevated oil prices linked to tensions in the Middle East had intensified global inflation pressures. Those worries led market participants to scale back expectations for more dovish central bank policies, which in turn reduced the attractiveness of non-yielding assets such as Silver.

As of writing, WTI Oil is down 4.8% and trading near $78.85, marking its lowest level in more than three months.

Official Statements on Hormuz and the Peace Deal

On Sunday, US President Donald Trump wrote on Truth Social, “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.”

At the same time, diplomatic signals have supported the improved risk backdrop. Iran’s Deputy Foreign Minister Kazem Gharibabadi has confirmed that an agreement has been achieved to end the US-Israeli war with the Islamic Republic, according to The Times of Israel.

Fed Policy Decision in Focus

Looking ahead, market attention is now shifting to the Federal Reserve’s monetary policy announcement scheduled for Wednesday. The central bank is anticipated to keep its benchmark interest rate unchanged within the 3.50%-3.75% range. The outcome and accompanying communication are likely to be closely watched by Silver traders for clues on the interest rate outlook and its implications for non-yielding assets.

Technical Picture for XAG/USD

XAG/USD is trading notably higher around $70.80 at press time. Despite the strong intraday advance, the pair maintains a mildly bearish short-term tone, as it remains below the 20-day Exponential Moving Average (EMA), currently at $71.70. This positioning indicates that rallies could still be fragile while the broader corrective phase continues.

The Relative Strength Index (RSI) has moved back into the 40.00-60.00 band after spending time below the 40.00 mark, indicating early signs of a potential bullish reversal. However, the signal would be considered more robust if the RSI were to break above 60.00.

On the upside, a daily close above the 20-day EMA would be seen as an initial step toward stabilization, potentially paving the way for a more durable move higher toward the May 25 peak at 78.83, and then the psychological $80.00 mark. On the downside, if XAG/USD is unable to recover and hold above the 20-day EMA, attention is likely to shift back to lower levels, including a possible revisit of the March 23 low at $61.01.