Silver prices climbed to a two-week high near $78.00 on Tuesday, extending a rally from Monday’s low of $72.60. The move came as the US dollar retreated on reports that the United States and Iran may resume peace talks, boosting demand for precious metals.
Diplomatic thaw supports risk sentiment
Signs that tensions in the Persian Gulf could ease helped lift risk appetite across markets.
Reports suggested the US naval blockade around Iranian ports may be relaxed, with both Washington and Tehran preparing for a fresh round of negotiations after talks in Pakistan broke down over the weekend.
US President Donald Trump said Iranian officials had reached out to explore possible progress, while Reuters reported that both delegations could return to Islamabad later this week.
Although the collapse of last weekend’s discussions briefly pressured metal prices, a two-week ceasefire remains in place. That truce is helping sustain expectations that diplomacy could deliver a more durable settlement and reduce the risk of further escalation.
Technical picture remains constructive
From a technical standpoint, silver continues to trade within an upward channel, underscoring a positive short-term bias.
- The Relative Strength Index (RSI) is near 64, pointing to strong upward momentum but still below the overbought threshold.
- The MACD stands around 0.16, signalling persistent buying interest rather than exhaustion.
Market focus is now on whether prices can decisively clear last week’s high at $77.65. A sustained break above that level could open a move toward the psychological $80.00 area and the April 1 peak at $81.13.
On the downside, immediate support is seen at the lower boundary of the ascending channel around $74.75, followed by Monday’s low near $72.60. A deeper pullback could bring the broader support band between $66.70 and $68.30 back into play, a zone that contained declines in late March and early April.
Macro backdrop: softer dollar, stubborn inflation
Silver’s strength reflects both its role as an industrial metal and as a perceived safe haven, with geopolitical headlines, dollar moves and shifting interest rate expectations all in play.
The dollar’s pullback from recent highs has provided a tailwind to dollar-denominated assets, especially for traders exposed to currency swings. Market participants largely linked this move to the latest diplomatic news rather than to a material change in the underlying economic outlook, raising questions about how durable the dollar weakness will be.
At the same time, US inflation remains sticky. The latest Consumer Price Index showed annual inflation holding at 3.5 percent, above the Federal Reserve’s 2 percent target. That persistence has prompted analysts to delay expectations for any near-term rate cuts, a medium-term support for the greenback that could ultimately cap gains in precious metals if it reasserts itself.
Industrial demand underpins silver
Beyond its monetary appeal, silver is also benefiting from signs of steady industrial demand.
The latest ISM Manufacturing PMI came in at 52.1, marking a third consecutive month of expansion in US factory activity. Continued strength in manufacturing reinforces the case for silver’s use in industrial applications, from electronics to solar panels, and suggests a broader economic backdrop that is more resilient than many had anticipated.
Outlook: data and Fed signals in focus
For traders active in markets that tend to benefit from episodes of dollar softness, the immediate easing in geopolitical tensions offers an opportunity. However, the macro data backdrop argues for caution.
The next key catalysts are likely to come from:
- The Federal Reserve’s meeting minutes due later this week, which will be examined for any shift in tone on the timing and scale of future rate moves.
- The upcoming release of the Personal Consumption Expenditures (PCE) price index, the Fed’s preferred inflation gauge, expected later this month.
How the dollar responds to these inflation readings and central bank signals is likely to shape the next major move in silver and other speculative assets, determining whether the current rally can extend beyond the $80.00 region or gives way to a period of consolidation.
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