Silver Price Forecast: XAG/USD falls to near $65.50 amid US-Iran peace uncertainty

Silver prices have fallen to near $65.50 per troy ounce following two days of gains, indicating uncertainty ahead of potential US-Iran peace negotiations. Traders remain cautious due to inflation risks, as both the US and Iran's statements have dimmed prospects for a diplomatic agreement. US President Donald Trump has shown no interest in extending the interim peace deal, citing the naval blockade of Iranian ports and reaffirming his proposal to declare the waterway as US territory.

In contrast, Iran's Foreign Ministry spokesman stressed the security complexities and obstructionist behavior of destructive elements, insisting on lifting the blockade first. However, silver prices might rebound due to fading expectations of further interest rate hikes by the Federal Reserve. Recent data, such as a drop in US Nonfarm Payrolls and modest consumer price inflation, have reduced the likelihood of a monetary tightening next month.

Investors are now focusing on the upcoming Fed meeting minutes. Technical analysis shows that XAG/USD trades at $65.60 with a bullish near-term bias, supported by the nine-day and 50-day Exponential Moving Averages and a positive Relative Strength Index (RSI) of 60.51. The Fed Sentiment Index suggests a less aggressive policy backdrop for silver.

Immediate support is at the nine-day EMA ($64.27), followed by the 50-day EMA ($63.33), with a more distant structural floor around $55.63. The next notable resistance level is at $90.03. Silver is a crucial precious metal in investment portfolios due to its intrinsic value and potential as a hedge during high-inflation periods.

It is also widely used in various industries, such as electronics and solar energy, and its price is influenced by various factors, including geopolitical instability, interest rates, and US-China-Indian economies.