Silver (XAG/USD) demonstrated significant strength on Tuesday, rebounding sharply from Monday's low near $72.60 and approaching the $78.00 level, marking a fresh two-week high. The rally was primarily driven by improved macroeconomic sentiment and a weaker US dollar, with a reassessment of geopolitical tensions serving as a key catalyst.
Market risk appetite improved noticeably amid rising expectations that the United States and Iran may resume a new round of negotiations. US President Donald Trump indicated that Iran had initiated contact to seek progress on an agreement. Market surveys suggest that negotiation teams from both sides may return to Islamabad for further discussions. Although talks over the weekend did not yield a breakthrough, communication channels remain open. This signal has effectively eased market concerns about a further escalation of conflict.
Against this backdrop, the US dollar faced broad-based pressure, providing support for precious metals. Like gold, silver is priced in US dollars; a weaker dollar typically lowers the holding cost for international investors, attracting capital inflows. Additionally, the existing ceasefire agreement remains in effect, reinforcing market confidence that the situation remains manageable and encouraging allocations toward risk assets and precious metals.
It is important to note, however, that geopolitical risks have not completely dissipated. Previous breakdowns in talks led to short-term declines in precious metals, as key disagreements—particularly on nuclear-related issues—remain unresolved. Therefore, the current rise in silver is more a reflection of market expectations that "negotiations are still possible," rather than a sign that underlying risks have been eliminated.
From a market structure perspective, silver's current movement shows clear technical recovery characteristics. After a recent pullback, the price has returned to an upward channel, indicating that the short-to-medium-term bullish trend remains intact. On a daily chart, the overall trend remains upward, with prices establishing higher lows above the $70 level, suggesting sustained buying interest.
On the 4-hour chart, silver is trading within a well-defined ascending channel, reflecting short-term strength. Momentum indicators show the RSI holding around 64, indicating sufficient bullish momentum without entering overbought territory, which leaves room for further gains. The MACD indicator remains positive at around 0.16, signaling strengthening buying interest.
Technically, bulls are focused on whether the price can break above the previous high of $77.65. A sustained move above this level could open the way toward the $80.00 psychological barrier, with further resistance near the prior peak around $81.13. On the downside, near-term support lies around the lower boundary of the rising channel near $74.75. A break below this level could lead to a retest of the $72.61 low, with deeper support located in the $66.70–$68.30 range.