The expectation of a US-Iran agreement has driven the dollar lower, supporting a rise in silver prices, which are expected to break through the resistance level in the short term.
2026-05-07 14:50:04
Spot silver (XAG/USD) continued its rebound in early Asian trading on Thursday, trading around $78.90 per ounce, marking its second consecutive day of gains. Overall pressure on the US dollar index and changes in market expectations regarding future Federal Reserve policy were key factors driving the silver rebound.
Recent market expectations for a potential agreement between the US and Iran have continued to rise, causing a significant drop in international crude oil prices. With lower energy prices, concerns about a resurgence of global inflation have eased somewhat.
Against this backdrop, investors have begun to reassess the necessity for the Federal Reserve and other major central banks to maintain high interest rate policies for an extended period, thereby driving up funding for non-yielding assets such as silver.
The decline in international oil prices has eased inflation concerns, becoming a key factor supporting silver prices recently. Previously, escalating tensions in the Middle East had driven international energy prices up rapidly, raising concerns about renewed global inflationary pressures and reinforcing expectations that major central banks would maintain high interest rates. However, as the market perceived a potential agreement between the US and Iran, signs of easing global energy supply risks emerged, market risk sentiment gradually improved, and demand for the US dollar as a safe haven declined accordingly.
Iran said on Wednesday that the US-proposed solution to end the conflict is "still under consideration." Earlier market reports indicated that the US had submitted a one-page memorandum of understanding to Iran, which included provisions for gradually restoring shipping through the Strait of Hormuz and easing US blockades on Iranian ports. However, no formal final agreement has yet been reached, and detailed negotiations on the Iranian nuclear issue are expected to follow.
Meanwhile, US President Trump continued to issue tough statements. Trump warned that if Iran rejects the peace agreement, the US will launch a "higher-intensity" military strike. Trump stated on social media that if Iran accepts the previously discussed agreement, US military action "may end." Although the situation in the Middle East is showing signs of easing, the market remains highly cautious about future developments.
On the other hand, concerns among Federal Reserve officials about inflation risks continue to limit further significant gains in silver. Chicago Fed President Goolsby stated that US inflation has not continued to decline toward the 2% target, but has instead shown signs of accelerating again since the start of the Middle East conflict. This statement implies that the Fed's future policy path remains highly uncertain. If US inflation rebounds, the Fed may maintain its high-interest-rate policy, thus limiting the upside potential for precious metals. The market focus is now gradually shifting to the upcoming US non-farm payroll data. If the US job market continues to be strong, it could drive a rebound in the dollar and put pressure on silver prices. However, if the employment data is weak, it could further strengthen market expectations for future Fed rate cuts, thus continuing to support silver's upward trend.
From a technical perspective, the daily chart for spot silver shows that after finding significant support near $75, silver prices have rebounded and are currently holding above $77, maintaining the overall medium-term uptrend. Silver prices are currently trading above the 20-day and 50-day moving averages, indicating that the overall market trend remains bullish. The $79.00 to $79.50 area has formed a significant resistance zone on the daily chart. A successful break above $79 could see silver prices further rise to the $80 psychological level, and even test the $81.50 area.
Looking at the downside, the 77.00 level forms the first significant support zone. A break below this level could lead to further retracements to the 76.20 and 75.50 areas. The daily MACD indicator is currently still above the zero line, but the momentum of the red bars has slowed, indicating a slight weakening of short-term bullish momentum. The RSI indicator remains around 58, suggesting the market remains relatively strong but has not yet entered a clearly overbought state. Overall, from a technical perspective, the medium-to-long-term trend for spot silver remains bullish, but the short-term trend has entered a high-level consolidation phase. The daily chart shows the bullish trend has not yet ended, while the 4-hour chart reflects a cooling of short-term momentum. As long as silver prices remain above 76.20, the medium-term upward trend is likely to continue. Future market direction will primarily depend on US non-farm payroll data, changes in expectations for Federal Reserve policy, and further developments in the Middle East.
Editor's Summary : The current silver price movement is primarily influenced by both a weakening US dollar and market repricing of Federal Reserve policies. In the short term, expectations of easing tensions between the US and Iran have driven down international oil prices and reduced demand for the US dollar as a safe haven, providing support for silver. However, warnings from Federal Reserve officials regarding inflation risks may still limit the upside potential for silver prices. From a technical perspective, the medium- to long-term trend for silver remains bullish, but it has entered a consolidation phase at higher levels in the short term. Future market volatility may further increase, and investors should pay close attention to US non-farm payroll data, the US dollar index, and the latest developments in the Middle East.
Recent market expectations for a potential agreement between the US and Iran have continued to rise, causing a significant drop in international crude oil prices. With lower energy prices, concerns about a resurgence of global inflation have eased somewhat.
Against this backdrop, investors have begun to reassess the necessity for the Federal Reserve and other major central banks to maintain high interest rate policies for an extended period, thereby driving up funding for non-yielding assets such as silver.
The decline in international oil prices has eased inflation concerns, becoming a key factor supporting silver prices recently. Previously, escalating tensions in the Middle East had driven international energy prices up rapidly, raising concerns about renewed global inflationary pressures and reinforcing expectations that major central banks would maintain high interest rates. However, as the market perceived a potential agreement between the US and Iran, signs of easing global energy supply risks emerged, market risk sentiment gradually improved, and demand for the US dollar as a safe haven declined accordingly.
Iran said on Wednesday that the US-proposed solution to end the conflict is "still under consideration." Earlier market reports indicated that the US had submitted a one-page memorandum of understanding to Iran, which included provisions for gradually restoring shipping through the Strait of Hormuz and easing US blockades on Iranian ports. However, no formal final agreement has yet been reached, and detailed negotiations on the Iranian nuclear issue are expected to follow.
Meanwhile, US President Trump continued to issue tough statements. Trump warned that if Iran rejects the peace agreement, the US will launch a "higher-intensity" military strike. Trump stated on social media that if Iran accepts the previously discussed agreement, US military action "may end." Although the situation in the Middle East is showing signs of easing, the market remains highly cautious about future developments.
On the other hand, concerns among Federal Reserve officials about inflation risks continue to limit further significant gains in silver. Chicago Fed President Goolsby stated that US inflation has not continued to decline toward the 2% target, but has instead shown signs of accelerating again since the start of the Middle East conflict. This statement implies that the Fed's future policy path remains highly uncertain. If US inflation rebounds, the Fed may maintain its high-interest-rate policy, thus limiting the upside potential for precious metals. The market focus is now gradually shifting to the upcoming US non-farm payroll data. If the US job market continues to be strong, it could drive a rebound in the dollar and put pressure on silver prices. However, if the employment data is weak, it could further strengthen market expectations for future Fed rate cuts, thus continuing to support silver's upward trend.
From a technical perspective, the daily chart for spot silver shows that after finding significant support near $75, silver prices have rebounded and are currently holding above $77, maintaining the overall medium-term uptrend. Silver prices are currently trading above the 20-day and 50-day moving averages, indicating that the overall market trend remains bullish. The $79.00 to $79.50 area has formed a significant resistance zone on the daily chart. A successful break above $79 could see silver prices further rise to the $80 psychological level, and even test the $81.50 area.
Looking at the downside, the 77.00 level forms the first significant support zone. A break below this level could lead to further retracements to the 76.20 and 75.50 areas. The daily MACD indicator is currently still above the zero line, but the momentum of the red bars has slowed, indicating a slight weakening of short-term bullish momentum. The RSI indicator remains around 58, suggesting the market remains relatively strong but has not yet entered a clearly overbought state. Overall, from a technical perspective, the medium-to-long-term trend for spot silver remains bullish, but the short-term trend has entered a high-level consolidation phase. The daily chart shows the bullish trend has not yet ended, while the 4-hour chart reflects a cooling of short-term momentum. As long as silver prices remain above 76.20, the medium-term upward trend is likely to continue. Future market direction will primarily depend on US non-farm payroll data, changes in expectations for Federal Reserve policy, and further developments in the Middle East.
Editor's Summary : The current silver price movement is primarily influenced by both a weakening US dollar and market repricing of Federal Reserve policies. In the short term, expectations of easing tensions between the US and Iran have driven down international oil prices and reduced demand for the US dollar as a safe haven, providing support for silver. However, warnings from Federal Reserve officials regarding inflation risks may still limit the upside potential for silver prices. From a technical perspective, the medium- to long-term trend for silver remains bullish, but it has entered a consolidation phase at higher levels in the short term. Future market volatility may further increase, and investors should pay close attention to US non-farm payroll data, the US dollar index, and the latest developments in the Middle East.
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