FX.co ★ PipsHunter99 | XAG/USD, SILVER

Silver (XAG/USD) Fundamental and Technical Analysis Silver prices started the week on a stronger footing, with XAG/USD advancing toward the $66.35 region during the European session after closing near $66.20 on Friday. The white metal benefited from an improvement in global risk sentiment following encouraging developments in negotiations between the United States and Iran. Investors responded positively after mediators from Qatar and Pakistan confirmed that the first round of talks aimed at securing a permanent peace agreement had produced constructive results. The negotiations, which began in Switzerland after last week's preliminary accord, are expected to continue throughout the week and have helped ease fears of a broader regional conflict. The progress in diplomatic discussions has reduced immediate concerns surrounding energy supply disruptions and geopolitical instability, encouraging investors to rotate back into commodities and precious metals. While silver traditionally benefits from safe-haven demand during periods of uncertainty, it also enjoys strong support when economic confidence improves because of its dual role as both a precious and industrial metal. The prospect of reduced tensions in the Middle East has therefore provided a supportive backdrop for silver prices. However, silver's upside potential remains constrained by the increasingly hawkish stance of the U.S. Federal Reserve. Last week's FOMC meeting significantly altered market expectations after policymakers maintained interest rates but signaled that further tightening remains a realistic possibility. Economists now anticipate two additional 25-basis-point rate increases before year-end, potentially occurring in September and December. This outlook would push the federal funds rate toward 4.10%, reinforcing expectations that U.S. monetary policy will remain restrictive well into 2027. The market's reaction to the Fed's updated projections was notable. Interest-rate expectations shifted sharply higher, with traders substantially increasing the probability of additional tightening. Although inflation expectations have moderated, policymakers continue to emphasize the need for caution, particularly given resilient economic activity and lingering price pressures. Higher interest rates generally create a headwind for non-yielding assets such as silver by increasing the opportunity cost of holding precious metals. As a result, any further gains in silver may depend on whether geopolitical optimism can outweigh the supportive effect of rising U.S. yields and a stronger dollar. Silver maintains a constructive bullish structure across both the H4 and H1 timeframes. On the H4 chart, price action continues to recover from the strong demand zone located between 64.80 and 65.20. This region served as a major accumulation area where buyers repeatedly absorbed selling pressure and established a series of higher lows. The strength of the rebound from this zone suggests that institutional demand remains active and continues to underpin the broader recovery trend. A significant supply zone is visible between 67.50 and 68.00, where previous rallies encountered heavy selling pressure and profit-taking activity. This area represents the primary upside target for buyers and may prove challenging to overcome without a fresh bullish catalyst. The 20-period SMA on the H4 timeframe is trending higher and currently acts as dynamic support beneath price, while the 50-period SMA remains below the market and reinforces the positive medium-term structure. As long as silver continues trading above both moving averages, the broader bullish outlook remains intact. On the H1 timeframe, short-term demand is concentrated between 65.50 and 66.00. This zone has repeatedly attracted buyers during intraday pullbacks, creating a foundation for continued upside attempts. Immediate supply is located between 67.00 and 67.50, where recent rallies have stalled. The 20-period SMA remains above the 50-period SMA, confirming a bullish crossover and signaling that short-term momentum continues to favor buyers. The moving-average alignment also suggests that dips toward support zones may continue to attract fresh buying interest. Key support levels to monitor include 65.50–66.00 initially, followed by the stronger H4 demand region at 64.80–65.20. A break below these levels would weaken the current bullish structure and expose deeper downside risks. On the upside, resistance stands at 67.00–67.50, followed by the major psychological barrier at 68.00. A decisive breakout above this supply region could accelerate bullish momentum and pave the way for a move toward higher recovery targets.