Silver Price Forecast: XAG/USD struggles around $81 while outlook remains firm on Iran optimism
Silver price (XAG/USD) struggles to extend recovery above $81.00 during the European trading session on Wednesday. The white metal ticks down as the US Dollar (USD) strives to gain ground after a seven-day losing streak.
  • Silver price faces slight selling pressure while attempting to extend the upside above $81.00.
  • The outlook of the Silver price remains firm on the US-Iran optimism.
  • Traders expect the Fed to avoid any monetary policy adjustment this year.

Silver price (XAG/USD) struggles to extend recovery above $81.00 during the European trading session on Wednesday. The white metal ticks down as the US Dollar (USD) strives to gain ground after a seven-day losing streak.

As of writing, the US Dollar Index (DXY), which tracks the Greenback’s value against six major currencies, edges up to near 98.10, but is close to its almost seven-week low of 98.00.

Technically, a higher US Dollar makes the Silver price a favorable risk-reward bet for investors. However, the outlook of the Silver price has improved amid growing expectations that the United States (US) and Iran could reach a permanent ceasefire soon.

US President Donald Trump has expressed confidence that Washington and Iran could reach a permanent ceasefire in the next two days. Trump said in an interview with ABC News that he doesn’t believe it will be necessary to extend the two-week ceasefire, adding, "I think you’re going to be watching an amazing two days ahead. I really do." 

Theoretically, signs of easing geopolitical tensions diminish demand for safe-haven assets, such as Silver; however, its demand has increased as Iran optimism has weighed heavily on the oil price.

Higher energy prices amid intensified attacks in the Middle East had de-anchored global inflation expectations, which also forced traders to raise bets supporting interest rate hikes by the Federal Reserve (Fed) for the year, a scenario that diminishes demand for non-yielding assets, such as Silver.

However, easing oil prices have anchored inflation projections again, and are supporting the Silver price. According to the CME FedWatch tool, there is 65% chance that the Fed will not make any monetary policy adjustment this year.

Silver technical analysis

XAG/USD trades subduedly around $79.50 after facing selling pressure near $81.00. The near-term trend of the spot remains bullish as it holds above the 20-day Exponential Moving Average (EMA) at $75.91. The overall trend appears to be neutral as the Silver price trades inside the Ascending Triangle formation on a daily timeframe.

The Relative Strength Index (14) wobbles inside the 40.00-60.00 range, reflecting a sharp volatility contraction.

On the downside, initial technical support is seen at the 20-day EMA near $75.91, ahead of the rising trend-line region clustered around $74.51, where buyers have repeatedly emerged in recent weeks. On the upside, the Silver price could jump towards the $85 mark if it manages to break above the horizontal resistance around $81.00.

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

Silver FAQs

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.

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.

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.

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.

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