XAG/USD holds majority losses near $74 as fears of hawkish Fed outlook revives

• Silver price recovers half of its early losses, still almost 2% down at around $74.35.
• US-Iran high-stakes talks collapse as Iran refuses to give up its nuclear ambitions.
• US President Trump acknowledges that gas prices could remain elevated through November elections.

Silver price (XAG/USD) claws back half of its early losses and rebounds to near $74.35 during the early European trading session on Monday, but is still almost 2% down. The white metal is broadly under pressure as a sharp recovery in the oil price due to failed talks between the United States (US) and Iran, which were scheduled over the weekend in Pakistan, has de-anchored inflation expectations again.

Negotiations between the US and Iran towards a permanent ceasefire in the Middle East failed to succeed as Tehran denied giving up its nuclear ambitions, according to US President Donald Trump’s post on Truth Social.

In response, US President Trump instructed the Navy to blockade maritime traffic entering and exiting Iranian ports.

Meanwhile, US President Trump has also acknowledged, in an interview with Fox Business, that US gas prices could remain at their current levels or higher through the November elections.

The revival in elevated inflation expectations in the wake of higher oil prices is expected to force traders to raise bets supporting interest rate hikes by the Federal Reserve (Fed) in the near term, a scenario that typically diminishes demand for non-yielding assets, such as Silver.

In late March, traders were pricing in two interest rate hikes by the Fed this year but priced out, following the announcement of a two-week ceasefire between the US and Iran.

Silver technical analysis

XAG/USD trades lower at around $74.35 during the press time, holding a neutral near-term bias as it remains close to the 20-day exponential moving average (EMA), which is around $75.05.

The 14-day Relative Strength Index struggles to return above the 50.00 mark, hinting that recovery attempts may continue to face selling pressure on approaches to higher levels.

On the downside, initial support is seen near the former upward trend-line break zone around $73.74, where buyers could look to slow the decline. On the topside, a daily close back above the 20-day EMA at $75.05 would be needed to ease the current bearish tone and open the way for a more sustained rebound towards the April 2 high of $81.13.