Silver (XAG/USD) climbed to about $66.35 in early European trading on Monday as buying interest returned after reported progress towards a US–Iran peace deal. Mediators Qatar and Pakistan said the first round of talks to reach a final agreement to end the war concluded with “encouraging progress”, according to the BBC, following negotiations that began on Sunday in Switzerland after last week’s initial agreement; technical discussions are set to continue through the week.
On the daily chart, silver remains below the 20-period Bollinger SMA and the 100-day MA, keeping the market under pressure, while the 14-day RSI sits just above 40. Resistance is seen at the Bollinger middle band near $70.18, then the 17 June high at $71.56, with further barriers at the 100-day MA around $76.90 and the upper Bollinger band close to $78.55. Support lies at the lower Bollinger band near $61.80, and a break beneath it would bring focus to the 11 June low of $61.50.
Geopolitical Developments And Dollar Impact
The developing peace talks between the US and Iran are the primary driver for silver this week. While easing geopolitical tension typically reduces safe-haven demand, the immediate effect has been a weaker US Dollar, which is providing support for the metal. We are treating this as a temporary floor for prices rather than a new bullish catalyst.
We’ve seen the US Dollar Index (DXY) dip 0.5% to 104.50 on this news, making dollar-priced silver cheaper for foreign buyers. This is compounded by recent Federal Reserve commentary, with futures markets now pricing in a 60% probability of a rate cut before year-end. Lower interest rates typically boost non-yielding assets like silver.
Technical Levels, Industrial Demand, And Trading Strategies
Despite the supportive news, the technical chart remains weak, with the price below the key $70.18 moving average. We see this as a critical level to watch, as a failure to break above it would confirm that sellers are still in control. For now, the path of least resistance appears to be sideways to down.
We are also considering the strong undercurrent of industrial demand, which acts as a long-term support factor. A recent Global Electronics Council report noted a 3% rise in semiconductor orders for Q2 2026, which should sustain silver consumption. This fundamental strength might prevent a deep price collapse even if the safe-haven bid evaporates.
The Gold/Silver ratio is currently elevated, trading near 90:1, which is well above the 21st-century average of around 65:1. Historically, such high ratios have often preceded periods of silver outperformance relative to gold. We view this as a potential indicator that silver may be undervalued compared to its counterpart.
Given the conflicting signals between fundamentals and technicals, we believe implied volatility could rise in the coming weeks. Traders might consider buying options to define risk, such as purchasing call options above the $70.18 resistance or put options below the $61.80 support. This approach allows for participation in a breakout while capping potential losses if the market remains range-bound.
