Silver prices (XAG/USD) rose on Monday, trading at $58.38 per troy ounce, up 1.37% from $57.59 on Friday, according to FXStreet data [1]. Source 2 reports that Silver opened strongly due to a sharp decline in oil prices, but struggled to extend gains beyond $58.68 during the day, with the price up 1% to near $58.20 at press time [2]. The Gold/Silver ratio stood at 69.56 on Monday, down from 70.19 on Friday, indicating a relative strengthening of Silver compared to Gold [1].
The rise in Silver prices was attributed to lower oil prices following the announcement of a ceasefire 2.0 between the United States and Iran. Over the weekend, US President Donald Trump announced that planned attacks on Iran were suspended as Tehran agreed to the nuclear deal and the reopening of the Strait of Hormuz, a key passage for global energy supply [2]. This development anchored global inflation expectations, supporting non-yielding assets like Silver [2].
Despite the initial gains, Silver has underperformed in recent months due to higher oil prices fueling global inflation projections, which have prompted central banks, including the Federal Reserve, to tighten monetary conditions. Analysts at Deutsche Bank expect two further 25bps Fed rate hikes this year, and the CME FedWatch tool indicates a 64.5% probability of a rate hike next month [2]. This hawkish outlook is likely to restrict Silver’s upside, as higher interest rates tend to weigh on non-yielding assets [2].
Technically, XAG/USD trades higher at around $58.20 but maintains a bearish near-term tone, holding beneath the 20-day Exponential Moving Average (EMA) at $58.79. The failure to reclaim this EMA suggests rallies remain capped, while the Relative Strength Index (RSI) at 46 signals modest downside pressure. Initial resistance is at the 20-day EMA ($58.79), with key support at the July 17 low of $54.77 [2].
CONCLUSION
Silver prices rose on Monday, supported by lower oil prices and geopolitical developments, but remain capped by a bearish technical outlook and expectations of further Fed rate hikes. The market reaction is mixed, with short-term gains offset by ongoing downside pressure and hawkish monetary policy. Investors should monitor resistance and support levels as well as upcoming Fed decisions for further direction.