Silver prices hovered around $70 per ounce on Wednesday, extending gains that have pushed the metal up roughly 3% this week. Investors are closely monitoring the upcoming US-Iran peace agreement and the Federal Reserve’s policy decision, two developments that could shape the next major move in precious metals markets.
The rally comes after silver surged nearly $10 per ounce in just four trading sessions, highlighting renewed investor interest in the metal as macroeconomic conditions shift in its favor.
Market participants are awaiting the signing of an interim agreement between the United States and Iran in Switzerland on Friday. The deal is expected to restore Iranian oil exports and improve energy supply flows through the Persian Gulf.
Under the proposed framework, Iran could gain access to substantial economic incentives, including the ability to tap a reported $300 billion development fund if it fulfills its commitments. Increased oil supply could help stabilize energy prices and reduce inflationary pressures that have concerned investors throughout the year.
Lower energy prices may also ease concerns about future interest rate hikes, creating a more favorable backdrop for precious metals.
At the same time, geopolitical risks remain elevated. Iran's military warned of a "harsh response" if Israel continues attacks against Hezbollah in Lebanon. Speaking at the G7 summit in France, President Donald Trump urged Israel to show greater restraint, noting that the conflict has continued for too long and resulted in significant casualties.
Investors are also focused on the Federal Reserve's policy meeting. Officials are widely expected to leave interest rates unchanged.
The meeting marks the first under Fed Chair Kevin Warsh. While Warsh is not expected to contribute a "dot" to the Federal Open Market Committee's quarterly rate projections, traders will scrutinize his comments for clues about future policy direction.
Global central banks remain active as well. Earlier this week, the Reserve Bank of Australia held its benchmark rate steady at 4.35%, while the Bank of Japan raised its policy rate by 25 basis points to 1%.
These developments are reinforcing expectations that global monetary conditions could become more supportive for precious metals in the months ahead.
Silver's technical picture continues to attract attention from analysts.
Some market observers highlight a massive cup-and-handle pattern that has been developing on the monthly chart for more than four decades. While a short-term pullback remains possible after the recent sharp rally, the broader structure suggests that the long-term trend remains firmly bullish.
Source: TradingView via X
The metal has also successfully transformed a key resistance zone that capped prices since 2023 into support, a development many technicians view as a significant bullish signal.
The recent rally is also reshaping the outlook for silver mining companies.
A $10 increase in silver prices dramatically improves mining economics. Higher realized prices can expand operating margins and generate stronger cash flows, especially for producers with relatively fixed production costs.
Despite the move higher in the metal, many mining stocks continue to trade at valuations that some analysts consider historically depressed. This suggests the market may not yet fully reflect the operating leverage available to silver producers.
Looking ahead, some bullish forecasts point to a strong six-month period for silver if Treasury yields retreat from current levels. Historically, declines in 10-year Treasury yields from the 4.6%-4.7% range toward 4.0% have often coincided with powerful silver rallies.
Combined with ongoing supply deficits, improving technical conditions, and shifting macroeconomic trends, silver remains one of the most closely watched assets in global markets. While volatility is likely to remain elevated, the broader outlook continues to favor higher prices over the long term.
