Silver starts the week on firmer footing, with XAG/USD gaining around 0.4% to trade near $66.50 on Monday. The metal is managing to advance despite a relatively steady US Dollar, with the DXY holding around 100.25, as softer energy prices provide some relief to precious metals.
Much of the attention remains on the Middle East and the recent retreat in crude oil prices. Lower energy costs have helped reduce immediate fears of another acceleration in inflation, potentially easing some of the pressure on the Federal Reserve to maintain an increasingly aggressive tightening path.
Oil's decline has been supported by hopes that diplomatic engagement between Washington and Tehran could resume. President Donald Trump indicated that he could be open to meeting Iranian President Masoud Pezeshkian during the United Nations General Assembly in New York this week. The possibility of renewed dialogue has helped remove some of the geopolitical premium that had previously pushed energy prices sharply higher.
Nevertheless, geopolitical risks remain elevated. Iran has communicated conditions to Washington through international mediators while warning of a forceful response to any renewed US attack. Continued tensions involving Iran-backed Houthis and Saudi forces also mean that the risk of fresh disruption has not disappeared.
For Silver, the other major influence remains US monetary policy. The Fed raised rates by 25 basis points last week as policymakers continued to confront elevated inflation, leaving investors focused on whether additional tightening will follow.
Comments from Fed official Austan Goolsbee reinforced the central bank's cautious stance. While expressing confidence that inflation can eventually return toward 2%, he indicated that renewed signs of excessive demand would warrant tighter policy. His emphasis on persistent supply-related inflation pressures also suggests policymakers are not yet prepared to declare the inflation battle over.
That creates a mixed environment for Silver. Falling oil prices and easing inflation fears are supportive, but expectations that US interest rates could rise further remain an important constraint for the non-yielding metal.
Attention now turns to preliminary S&P Global PMI figures, University of Michigan Consumer Sentiment data and further Fed commentary for additional direction on rates and the Dollar.
Technical Analysis
Silver is maintaining a constructive setup on the 1-hour chart, with XAG/USD trading around $66.64 after rebounding strongly from the mid-September lows near $62.50. The recovery has produced a clear sequence of higher lows, suggesting buyers are gradually rebuilding control after the earlier selloff.
Price is currently challenging an important resistance area around $66.90–$67.40. This zone has repeatedly capped upside attempts and therefore represents the main obstacle separating Silver from a stronger continuation move. The recent pullback toward $65.80 was quickly absorbed, allowing price to recover toward resistance again.
A decisive break above $67.40–$67.50 would provide stronger confirmation that the bullish recovery is extending. The projected structure suggests Silver could initially accelerate toward the $68.50–$69.00 region, before undergoing a short corrective pullback. Provided the breakout zone subsequently holds as support, buyers would remain positioned for another leg higher.
The larger objective sits around $71.20–$71.50, where the chart shows a significant supply zone. This area represents the primary upside target and would bring Silver back toward levels last tested during the sharp late-August advance.
On the downside, $65.20–$65.50 is the first major support zone. Holding above this area preserves the higher-low structure and keeps the bullish scenario intact. A sustained break underneath it would weaken momentum and expose the deeper $62.50–$62.80 demand zone.
Overall, Silver appears to be building toward a bullish breakout and continuation move. Confirmation above $67.50 would strengthen the case for an advance through $69.00 and eventually toward the major $71.30 area.
TRADE RECOMMENDATION
BUY SILVER
ENTRY PRICE: $66.50
STOP LOSS: $64.00
TAKE PROFIT: $71.30