Silver traded near $73.30–$73.50 per troy ounce in European hours on Monday after rebounding from earlier losses. Support came as markets reduced expectations for a more hawkish Federal Reserve stance amid reports of possible Middle East ceasefire talks, which also weighed on oil prices and eased inflation worries. The United States and Iran received a two-step proposal: an immediate ceasefire followed by a wider agreement. Pakistan’s army chief Asim Munir was reported to be in ongoing contact with US Vice President JD Vance, envoy Steve Witkoff, and Iranian Foreign Minister Abbas Araghchi, while Tehran said it would not reopen the Strait of Hormuz under a temporary ceasefire.

Ceasefire Talks And Fed Expectations

Bloomberg, citing Axios, reported discussions of a 45-day ceasefire involving the US, Iran, and regional mediators. This followed US President Donald Trump’s warning that he would bring “hell” to Tehran if no deal is reached. Markets still price in delayed Fed rate cuts, with the chance of higher borrowing costs later this year if inflation stays persistently elevated. Traders are awaiting the latest Federal Open Market Committee meeting minutes for added policy guidance. Looking back to 2025, we saw silver prices surge to near $73.50, largely driven by intense geopolitical fears and concerns over a hawkish Federal Reserve. Today, with the XAG/USD price consolidating around a more stable $34.75, the landscape has clearly shifted away from that crisis-driven peak. The partial easing of Middle East tensions following the 2025 ceasefire talks has significantly reduced silver’s appeal as a primary safe-haven asset. The debate over the Fed’s policy, which dominated last year, has also evolved considerably. While in 2025 the market feared persistent inflation could lead to rate hikes, recent data shows US inflation has cooled to a more manageable 2.9% year-over-year as of the March 2026 CPI report. Consequently, derivative traders should now be positioning for a more dovish Fed, with strategies that could benefit from potential rate cuts later this year, a stark contrast to the hawkish sentiment of the past.

Industrial Demand And Relative Value

While the geopolitical premium has faded, we must not ignore silver’s powerful industrial demand story. The push for green energy has only accelerated, with the International Energy Agency’s latest Q1 2026 report confirming that global solar panel installations in 2025 surpassed all projections, and 2026 is on track to set another record. This robust demand provides a strong fundamental floor for the price, suggesting that put options sold at lower strikes could offer attractive premium-capturing opportunities. We should also consider the Gold/Silver ratio, which provides important context. After silver’s dramatic price correction from its 2025 highs, the ratio has expanded to around 88:1, well above its 21st-century average of approximately 65:1. For traders, this indicates that silver is historically cheap compared to gold, presenting potential pair trade opportunities or a basis for long silver positions relative to gold. Create your live VT Markets account and start trading now.

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