Silver Price Forecast: XAG/USD rally pauses below 50-day SMA after intraday surge

Silver (XAG/USD) gains traction on Wednesday as renewed optimism surrounding a potential US-Iran peace deal triggers a sharp decline in the US Dollar (USD) and Oil prices. At the time of writing, XAG/USD is trading around 77, up over 5.50% on the day.

The latest leg higher comes after Axios reported that Washington and Tehran are moving closer to a potential agreement aimed at ending the war and establishing a framework for detailed nuclear negotiations.

The sharp decline in crude Oil helped ease immediate inflation concerns, pushing US Treasury yields lower and providing additional support to the non-yielding metal. Traders also shifted back toward pricing in the possibility of Federal Reserve (Fed) rate cuts by year-end.

Despite the renewed optimism, uncertainty over whether the US and Iran can reach a final agreement continues to keep markets on edge, limiting further upside in Silver. The technical outlook also points to a possible consolidation phase following the intraday surge.

Technical Analysis:

In the daily chart, XAG/USD remains capped in the near term, as spot holds below the 50-day Simple Moving Average (SMA) and the 100-day SMA, keeping recovery attempts vulnerable while those barriers stand overhead.

Momentum has improved, with the Relative Strength Index near 53 and the Moving Average Convergence Divergence (MACD) fractionally positive, but the subdued Average Directional Index around 12 suggests a weak underlying trend, hinting at consolidation rather than a sustained breakout.

On the topside, initial resistance is aligned at the 50-day SMA at $77, with a stronger hurdle emerging at the 100-day SMA near $80, where a daily close above would be needed to ease the current capped tone.

On the downside, initial support is seen in the $70.00-$71.00 zone, while the 200-day SMA at $63 offers the next significant structural support, and while it sits well below current prices, it defines the broader bullish floor that would need to give way to signal a deeper bearish reversal.

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