The anticipated US-Iran agreement is weakening demand for the US dollar as a safe haven, and silver may bottom out and rebound.
2026-05-25 15:35:16
Spot silver maintained a slightly bullish trend during Monday's European trading session, trading around the mid-$77 area. Although it failed to break through the key resistance area of $79, the overall decline in the US dollar index and improved market risk sentiment still provided some support for silver.
The current market is primarily focused on trading around the peace negotiations between the US and Iran. As market expectations rise for a potential agreement, global risk sentiment has improved significantly, and demand for the US dollar as a safe haven has cooled, thus providing buying support for precious metals. US President Trump stated over the weekend that a US-Iran agreement is nearing completion, including key provisions such as the reopening of the Strait of Hormuz. This news eased market concerns about Middle Eastern energy supply risks and significantly improved market risk appetite.
However, Trump later stated that the US would maintain the strait blockade until a formal agreement was reached, and instructed negotiators not to "rush to an agreement." These contradictory statements have kept the market cautious about future developments in the Middle East. While overall market risk sentiment has improved, geopolitical risks have not been completely resolved, thus preserving some safe-haven demand in the precious metals market.
Meanwhile, global market trading volume was relatively light due to the Memorial Day holiday in the US and UK. In this environment of low liquidity, precious metal prices were more influenced by the dollar's performance and technical buying. The recent overall pressure on the dollar index is also a significant reason for silver's continued high levels. As market expectations for further interest rate hikes by the Federal Reserve have cooled, the dollar's yield advantage has begun to weaken.
Previously, rising international oil prices and tensions in the Middle East had raised concerns that US inflation might rebound, prompting the Federal Reserve to maintain high interest rates for an extended period. However, with progress in negotiations between the US and Iran, international oil prices saw a significant correction, reducing market concerns about further deterioration in US inflation. Market bets on further Fed rate hikes this year have decreased significantly, and the decline in the US dollar index has provided support for dollar-denominated precious metals such as silver.
In addition, silver possesses both precious metal and industrial attributes. When market risk appetite improves, investors typically increase their focus on industrially relevant assets such as silver, which also provides some support for silver prices.
From a technical perspective, silver is currently exhibiting a relatively clear technical correction. After a significant pullback, silver prices are gradually forming an inverted head and shoulders pattern, which is typically considered a bottoming signal. The market is currently focusing on the resistance area around $79. This level not only corresponds to the high point of May 19th but also approaches the 38.2% Fibonacci retracement level of the previous downtrend.
If silver can effectively break through the 79.00-79.20 area, the market may open up further upside potential and could retest the $80 level. Further upside targets are around $83, which corresponds to both a previous key support area and the 61.8% Fibonacci retracement level.
From a daily chart perspective, the RSI indicator is currently trading above 50 in a neutral-to-strong zone, indicating that short-term market momentum is gradually improving. Meanwhile, the MACD indicator continues to remain above the zero line, with the red bars expanding, reflecting that bullish forces still hold a certain advantage in the market. However, given the significant gains silver has previously seen, the market may still face some profit-taking pressure in the short term. Furthermore, a rebound in the US dollar index or a renewed hawkish signal from the Federal Reserve could also put downward pressure on silver prices.
On the downside, the area around $77 has formed a significant short-term support zone. This level corresponds to the previous high on May 21st and has now transformed from resistance into temporary support. If silver prices break below $77, they may fall further to around $75; while more crucial support lies in the $73.10 area.
Overall, the current silver price movement is mainly driven by the decline in the US dollar index, progress in US-Iran negotiations, and a technical rebound. Although the market maintains a slightly bullish trend in the short term, future price movements will still depend on changes in the US dollar, expectations for Federal Reserve policy, and the latest developments in the Middle East.
Editor's Summary : The silver market is currently in a tug-of-war between "dollar pullback support" and "technical resistance suppression." Improved market risk sentiment following US-Iran negotiations has reduced demand for the dollar as a safe haven, thus providing a short-term boost to silver. Simultaneously, the emergence of an inverted head and shoulders pattern on the silver technical chart reinforces market expectations for a phase of recovery. However, the $79 area remains a key resistance level; failure to break through effectively could lead to continued high-level consolidation in the short term. Going forward, the market will need to focus on the progress of the US-Iran agreement, the Fed's policy path, changes in the dollar index, and the outlook for global industrial demand, as these factors will continue to influence the future direction of silver.
The current market is primarily focused on trading around the peace negotiations between the US and Iran. As market expectations rise for a potential agreement, global risk sentiment has improved significantly, and demand for the US dollar as a safe haven has cooled, thus providing buying support for precious metals. US President Trump stated over the weekend that a US-Iran agreement is nearing completion, including key provisions such as the reopening of the Strait of Hormuz. This news eased market concerns about Middle Eastern energy supply risks and significantly improved market risk appetite.
However, Trump later stated that the US would maintain the strait blockade until a formal agreement was reached, and instructed negotiators not to "rush to an agreement." These contradictory statements have kept the market cautious about future developments in the Middle East. While overall market risk sentiment has improved, geopolitical risks have not been completely resolved, thus preserving some safe-haven demand in the precious metals market.
Meanwhile, global market trading volume was relatively light due to the Memorial Day holiday in the US and UK. In this environment of low liquidity, precious metal prices were more influenced by the dollar's performance and technical buying. The recent overall pressure on the dollar index is also a significant reason for silver's continued high levels. As market expectations for further interest rate hikes by the Federal Reserve have cooled, the dollar's yield advantage has begun to weaken.
Previously, rising international oil prices and tensions in the Middle East had raised concerns that US inflation might rebound, prompting the Federal Reserve to maintain high interest rates for an extended period. However, with progress in negotiations between the US and Iran, international oil prices saw a significant correction, reducing market concerns about further deterioration in US inflation. Market bets on further Fed rate hikes this year have decreased significantly, and the decline in the US dollar index has provided support for dollar-denominated precious metals such as silver.
In addition, silver possesses both precious metal and industrial attributes. When market risk appetite improves, investors typically increase their focus on industrially relevant assets such as silver, which also provides some support for silver prices.
From a technical perspective, silver is currently exhibiting a relatively clear technical correction. After a significant pullback, silver prices are gradually forming an inverted head and shoulders pattern, which is typically considered a bottoming signal. The market is currently focusing on the resistance area around $79. This level not only corresponds to the high point of May 19th but also approaches the 38.2% Fibonacci retracement level of the previous downtrend.
If silver can effectively break through the 79.00-79.20 area, the market may open up further upside potential and could retest the $80 level. Further upside targets are around $83, which corresponds to both a previous key support area and the 61.8% Fibonacci retracement level.
From a daily chart perspective, the RSI indicator is currently trading above 50 in a neutral-to-strong zone, indicating that short-term market momentum is gradually improving. Meanwhile, the MACD indicator continues to remain above the zero line, with the red bars expanding, reflecting that bullish forces still hold a certain advantage in the market. However, given the significant gains silver has previously seen, the market may still face some profit-taking pressure in the short term. Furthermore, a rebound in the US dollar index or a renewed hawkish signal from the Federal Reserve could also put downward pressure on silver prices.
On the downside, the area around $77 has formed a significant short-term support zone. This level corresponds to the previous high on May 21st and has now transformed from resistance into temporary support. If silver prices break below $77, they may fall further to around $75; while more crucial support lies in the $73.10 area.
Overall, the current silver price movement is mainly driven by the decline in the US dollar index, progress in US-Iran negotiations, and a technical rebound. Although the market maintains a slightly bullish trend in the short term, future price movements will still depend on changes in the US dollar, expectations for Federal Reserve policy, and the latest developments in the Middle East.
Editor's Summary : The silver market is currently in a tug-of-war between "dollar pullback support" and "technical resistance suppression." Improved market risk sentiment following US-Iran negotiations has reduced demand for the dollar as a safe haven, thus providing a short-term boost to silver. Simultaneously, the emergence of an inverted head and shoulders pattern on the silver technical chart reinforces market expectations for a phase of recovery. However, the $79 area remains a key resistance level; failure to break through effectively could lead to continued high-level consolidation in the short term. Going forward, the market will need to focus on the progress of the US-Iran agreement, the Fed's policy path, changes in the dollar index, and the outlook for global industrial demand, as these factors will continue to influence the future direction of silver.
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- The market involves risk, and trading may not be suitable for all investors. This article is for reference only and does not constitute personal investment advice, nor does it take into account certain users’ specific investment objectives, financial situation, or other needs. Any investment decisions made based on this information are at your own risk.
