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XAG/USD jumps over 2% to near $60 on renewed US-Iran diplomacy hopes
- Silver price gains sharply to near $60.00 as the US-Iran military aggression pauses.
- The pause in Middle East hostilities has weighed heavily on oil prices.
- The Fed is expected to leave interest rates unchanged on Wednesday.
Silver price (XAG) trades sharply higher near $60.00 during the Asian trading session on Monday. The white metal starts the week on a firm note as the pause in military aggression between the United States (US) and Iran has sent oil prices sharply lower.
The exchange of attacks between the US and Iran paused after US ambassador to the United Nations (UN), Mike Waltz, told “Fox News Sunday” that President Donald Trump had decided to pause US attacks to allow more time for diplomacy, Reuters reports.
In the Asian trade, the WTI Oil price trades 5.6% lower to near $84.00. A sharp decline in oil prices has reduced concerns of a prolong elevated inflation expectations, which has eased fears of higher interest rates by global central banks in the near term.
The Silver price underperformed in the last months when the onset of the Middle East war boosted oil prices. Technically, higher interest rates diminish the appeal of non-yielding assets, such as Silver.
Going forward, investors will pay close attention to the Federal Reserve’s (Fed) monetary policy announcement on Wednesday, in which the central bank is expected to leave interest rates unchanged.
Silver technical analysis
XAG/USD trades higher at around $60 at press time, striving to return above the 20-day Exponential Moving Average (EMA), which is at $59.35.
The 14-day Relative Strength Index (RSI) lifts toward the mid-40s and hints at modestly improving momentum rather than outright bearish exhaustion.
On the topside, a decisive daily close above the 20-day EMA at $59.35 would be needed to ease immediate downside pressure and open the way for a deeper recovery. Looking down, the July 17 low at $54.77 is the key support level.
