Silver (XAG/USD) and Gold (XAU/USD) both experienced significant gains during the Asian session on Wednesday, driven by news of a US-Iran ceasefire that pressured the US Dollar (USD) and boosted investor confidence in precious metals. Silver retreated slightly from its weekly high but remained up over 4.5% for the day, trading just below the mid-$76.00s, while Gold eased from a nearly three-week peak but held near the $4,800 mark, up 2.0% for the day [1][2].
The US Dollar Index (DXY) fell to a nearly one-month low following the announcement by US President Donald Trump that planned military strikes against Iran would be suspended for two weeks, contingent on Iran's agreement to open the Strait of Hormuz. Iran's Foreign Minister, Seyed Abbas Araghchi, confirmed acceptance of the two-week ceasefire, with negotiations set to begin in Islamabad, Pakistan. This development undermined the USD's status as a global reserve currency and supported both Silver and Gold prices [2].
Technical analysis for Silver indicates that the strong intraday move stalled near the 200-period Exponential Moving Average (EMA) on the 4-hour chart, with the $76.85 level acting as a key resistance. Acceptance above this level could open the way for further gains toward the 50% retracement level at $79.03. On the downside, the 38.2% Fibonacci retracement at $74.82 serves as immediate support, with further downside risk toward $72.00 if broken [1]. For Gold, the near-term bias is mildly bullish, with the price recovering above the mid-range of recent consolidation but still below the descending 200-period Simple Moving Average (SMA) and the 61.8% Fibonacci retracement level. A sustained move above the $4,920 confluence hurdle is needed to negate any near-term negative bias and target the $5,000 and $5,141 levels. Immediate support for Gold is at the $4,750 area [2].
The ceasefire also triggered a steep decline in Crude Oil prices, easing inflationary concerns and reducing expectations for a US Federal Reserve rate hike. This contributed to lower US Treasury yields and further weighed on the USD, providing additional support to non-yielding assets like Gold and Silver [2]. Technical indicators such as the MACD and RSI for both metals suggest strengthening upside momentum without signaling overbought conditions [1][2].
Analysts caution that while the technical setup is constructive, confirmation above key resistance levels is necessary before positioning for further gains in both Silver and Gold [1][2].
CONCLUSION
The US-Iran ceasefire has significantly weakened the US Dollar, fueling strong rallies in both Silver and Gold. While technical indicators point to further upside potential, confirmation above key resistance levels is needed for sustained gains. The market remains attentive to geopolitical developments and their impact on precious metals.