XAG/USD soars to near $70.80 as US-Iran reach peace deal

• Silver price surges 4% to near $70.80 as the US and Iran reach a peace deal.
• Oil prices nosedive almost 5% on the reopening of the Strait of Hormuz.
• The next trigger for the Silver price will be the Fed’s monetary policy announcement.

Silver price (XAG/USD) is up 4% to near $70.80 in the Asian trading session on Monday. The white metal rallies as the reopening of the Strait of Hormuz, a vital passage to almost 20% of global energy supply, followed by the confirmation of a peace deal between the United States (US) and Iran has pushed oil prices sharply lower.

In the past few months, higher oil prices due to Middle East concerns prompted inflationary pressures globally, and forced traders to price out dovish central bank bets, which diminished the appeal of non-yielding assets, such as Silver.

As of writing, the WTI Oil price is down 4.8% to near $78.85, the lowest level seen in over three months.

On Sunday, US President Donald Trump said in a post on Truth Social, “I hereby fully authorize the toll free opening of the Strait of Hormuz, and, simultaneously herewith, authorize the immediate removal of the United States Naval blockade.”

Meanwhile, Iran’s Deputy Foreign Minister Kazem Gharibabadi has also confirmed that a deal has been reached to end the US-Israeli war with the Islamic Republic, The Times of Israel reported.

Going forward, investors will pay close attention to the Federal Reserve’s (Fed) monetary policy announcement on Wednesday, in which it is expected to leave interest rates unchanged in a range between 3.50%-3.75%.

Silver technical analysis

XAG/USD trades significantly higher at around $70.80 at press time. Still, the pair holds a mild bearish near-term bias as price trades below the 20-day Exponential Moving Average (EMA) at $71.70, suggesting rallies remain vulnerable while the broader corrective tone persists.

The Relative Strength Index (RSI) returns to the 40.00-60.00 zone after remaining below 40.00, signaling signs of a bullish reversal. However, it would be more reliable once it breaks above 60.00.

On the topside, a daily close back above the 20-day EMA would be an initial sign of stabilization, opening the door for a more sustained recovery towards the May 25 high at 78.83, followed by the round-level $80.00. On the downside, failure to reclaim the 20-day EMA keeps the focus on lower levels and the retest of the March 23 low at $61.01.