Silver Price Forecast: XAG/USD holds losses near $74.00 on Middle East peace hopes

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Silver price (XAG/USD) halts its three-day winning streak, trading around $74.20 per troy ounce during the Asian hours on Wednesday. The safe-haven demand for Silver weakens as optimism grows over easing tensions in the Middle East.

Silver weakens as safe-haven demand fades amid growing optimism over easing Middle East tensions.
Trump indicated that the Iran conflict will end soon, within two to three weeks.
Non-yielding Silver may find support as easing geopolitical tensions lower oil prices and central bank tightening odds.

US President Donald Trump said on Tuesday that the United States (US) would be “leaving very soon” from the Iran conflict, with a withdrawal possible within two to three weeks. The remarks build on earlier signals that US objectives have largely been achieved, fueling expectations of a quicker resolution. Trump also stated that a formal agreement with Tehran is not required to end hostilities, emphasizing military outcomes over diplomatic negotiations.

Iranian President Masoud Pezeshkian expressed openness to de-escalation if specific guarantees are secured. However, Foreign Minister Abbas Araghchi maintained a firmer stance, rejecting a temporary ceasefire and calling for a full end to the war, alongside assurances against future attacks and compensation for damages, keeping uncertainty elevated.

Despite recent weakness, the non-yielding Silver could find support as easing tensions may lower oil prices and reduce fears of further central bank tightening. Silver fell nearly 20% in March, marking its sharpest decline since September 2011, driven by energy market disruptions and rising inflation concerns that reinforced a hawkish policy outlook. Markets have also shifted, with traders now abandoning expectations of US rate cuts in 2026, reversing earlier projections of two cuts before the conflict.

Silver FAQs

Why do people invest in Silver?

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.

Which factors influence Silver prices?

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.

How does industrial demand affect Silver 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.

How do Silver prices react to Gold’s moves?

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.