Silver (XAG/USD) rose on Wednesday after reports of progress towards a possible US-Iran peace deal. XAG/USD was trading around 77, up over 5.50% on the day.
Axios said Washington and Tehran are moving closer to an agreement to end the war and set a framework for detailed nuclear talks. The news was followed by falls in the US Dollar and crude oil prices.
Market Reaction And Macro Drivers
Lower oil prices eased short-term inflation fears and pushed US Treasury yields down, supporting the non-yielding metal. Markets also moved back towards pricing in Federal Reserve rate cuts by year-end.
Uncertainty remains over whether both sides will reach a final deal, which may limit further gains. The move also raised the chance of a consolidation phase after the intraday jump.
On the daily chart, silver stayed below the 50-day and 100-day Simple Moving Averages (SMAs). The Relative Strength Index was near 53, the MACD was fractionally positive, and the Average Directional Index was around 12.
Resistance sits at the 50-day SMA near $77 and the 100-day SMA near $80. Support is in the $70.00–$71.00 zone, with the 200-day SMA at $63.
Options And Volatility Strategy
The sudden price spike to the $77 resistance level, driven by geopolitical headlines, suggests we should approach this with caution. Given the uncertainty of a final US-Iran agreement, we see this as an opportunity to trade volatility rather than take a strong directional stance. Implied volatility on silver options has surged to a six-month high, reaching over 35% for front-month contracts, making option-selling strategies more attractive.
For those anticipating further upside if a deal is signed, buying a call spread is a defined-risk way to participate. A June $77/$80 call spread, for instance, would capture a move to the next key resistance level while limiting the premium paid during this period of high volatility. We must remember how a similar rally built on diplomatic hopes in late 2025 quickly reversed when those talks faltered.
The weak underlying trend indicators suggest this rally lacks technical conviction, opening the door for a consolidation phase. Selling an iron condor with strikes around the $70 support and $80 resistance levels would be a prudent way to collect premium, betting that the price remains range-bound as the market awaits concrete news. This strategy directly plays into the technical picture of a market that has moved too far, too fast on a single headline.
While the market is now pricing in a higher probability of a Fed rate cut, with the CME FedWatch Tool showing a 65% chance by September, we note that underlying inflation remains a concern. The most recent April Core CPI report came in at a stubborn 3.1%, which may limit the Fed’s ability to ease policy as quickly as traders now expect. This economic reality could cap any further significant, non-yielding asset rallies until a cut is more certain.
