Silver rallied sharply on Monday as investors moved back into precious metals after a tentative US-Iran peace framework eased fears of a prolonged energy shock.
Spot silver rose 4% to about $70.80 an ounce in Asian trade, extending a rebound that had built as oil prices fell and the dollar weakened.
The move came after Washington and Tehran signalled support for an agreement to end hostilities and reopen the Strait of Hormuz, the waterway that had become the main pressure point for global energy markets.
For silver, the relief was not just geopolitical.
The metal had been under pressure during the conflict because higher crude prices threatened to keep inflation sticky and delay any shift by central banks towards easier policy.
A drop of almost 5% in WTI crude helped reverse that trade, making non-yielding assets more attractive again.
Oil retreat changes the rate story
The Strait of Hormuz matters because a large share of global oil and liquefied natural gas moves through the route.
Any disruption there quickly feeds into fuel costs, shipping risks and inflation expectations.
That is why silver responded positively to falling crude, even though precious metals are usually bought during periods of geopolitical stress.
The market focus shifted from war risk to the possibility that lower energy prices could reduce pressure on the Federal Reserve to sound more hawkish.
The dollar’s pullback added another support. A softer US currency makes dollar-priced commodities cheaper for buyers using other currencies, helping to lift both gold and silver.
Fed decision becomes the next test
The rally now faces a central-bank test.
The Federal Reserve is expected to leave interest rates unchanged this week, but traders will be watching the tone of Chair Kevin Warsh’s first policy meeting closely.
If policymakers acknowledge lower energy pressure, silver could hold its rebound.
A warning that inflation risks remain elevated would make the rally harder to sustain, particularly after such a strong intraday move.
Silver’s dual role as a precious and industrial metal also matters.
Demand tied to solar panels, electronics and broader electrification has kept the long-term story constructive, but short-term trading is still being driven by rates, the dollar and oil.
Technical levels stay in focus
From a chart perspective, silver remains below the 20-day exponential moving average near $71.70, leaving the immediate recovery incomplete.
A daily close above that level would strengthen the case for a move towards $78.83 and then the $80 mark.
Failure to reclaim that area would keep the market vulnerable to profit-taking, with the March low near $61.01 still the key downside reference.
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