Silver (XAG/USD) rose 2.2% to about $80.80 in late Asian trade on Thursday, near a four-week high of $81.00. The move came as the US Dollar stayed weak on expectations of a US-Iran ceasefire.
The US Dollar Index (DXY) fell to a fresh over six-week low of 97.85. A weaker dollar can support demand for dollar-priced metals such as silver.
US officials said the war with Iran is “very close” to ending, and Washington is engaged in talks with Iran. Another round of negotiations is reported as likely to be scheduled in Pakistan, according to The Guardian.
Earlier talks did not produce an agreement, with the US setting terms linked to the Strait of Hormuz and Iran’s nuclear programme. In rates markets, traders now expect the Federal Reserve will not raise interest rates this year, versus two hikes projected in March.
On charts, silver is near the Ascending Triangle boundary at around $80.80 and above the 20-period EMA at $76.29, with trend-line support near $75.81. The RSI (14) is near 58; support levels include $76.29, $75.81, and the April 7 low at $68.28, while a break higher could target the March 13 high of $85.46.
Looking back to this time last year, we saw silver prices surge toward $81 on hopes of a truce with Iran and a weakening US Dollar. That optimism was driven by expectations that the Federal Reserve would hold off on interest rate hikes. The situation today, on April 16, 2026, could not be more different.
The US Dollar Index (DXY) is not at 97.85 like it was then; it is now trading robustly above 106, its highest level in over five months. This dollar strength is a significant headwind for silver, making it more expensive for buyers using other currencies. A strong dollar is often a bearish signal for precious metals.
Furthermore, last year’s belief that the Fed would not raise rates has completely reversed. Recent inflation data, with the Consumer Price Index (CPI) coming in hot at 3.5% year-over-year, has forced markets to price out expected rate cuts for 2026. Higher interest rates for longer reduce the appeal of holding non-yielding assets like silver.
Geopolitical tensions in the Middle East have escalated again, but unlike last year, this is not boosting silver significantly due to the overpowering effect of the strong dollar. While safe-haven demand exists, it is being overshadowed by the monetary policy outlook. The market environment is now defined by a strong dollar and persistent inflation.
Given this context, derivative traders should be cautious with outright bullish bets like buying call options or long futures contracts in the coming weeks. The strong resistance for silver is currently seen around the $29.50 level, a far cry from the $85 target we were eyeing in 2025. Strategies that benefit from range-bound price action or offer downside protection, such as selling covered calls or buying puts, may be more appropriate.
Traders should watch for a break below key support near $27.50, which could signal a deeper correction. The bullish technical setup from 2025, with its ascending triangle, has long since resolved. The current market dynamics suggest that any pullbacks from last year’s highs are not corrective pauses but part of a new, more bearish trend.
