The price of silver rose sharply on Tuesday, increasing by over 4% to around $59. This move pushed it above a downward trend line that had been limiting its growth since May.
The price of the metal increased, moving it up from a recent low of around $55. Optimism about potential talks between the US and Iran eased worries about rising oil prices, which allowed the metal’s value to bounce back.
US-Iran Diplomacy Hopes Take Pressure Off Silver
Silver finished Monday at $56.40, a gain of 0.90%, and continued to rise on Tuesday. This improvement followed signals from Tehran that they were still willing to talk with Washington, which also caused oil prices to stabilize after a significant increase – Brent crude had jumped about 30% since its July low.
Rising oil prices are impacting silver because they contribute to inflation. Continued inflation increases expectations that interest rates will go up – currently, there’s an 80% chance of a rate hike by the Federal Reserve in December, compared to 73% last week. Generally, higher interest rates aren’t good for silver as it doesn’t offer a return like other investments and hasn’t performed well as a safe haven recently.
Despite recent dips, the overall outlook for silver remains positive. Experts at the Silver Institute predict that demand will continue to exceed supply for the sixth year in a row in 2026, with a projected shortage of 46.3 million ounces. They also expect a 20% increase in demand for physical silver investments, reaching 227 million ounces. Even with a 13% price decrease in the last month, silver is still approximately 45% more expensive than it was a year ago.
Silver Price Escapes Two-Month Descending Channel
Looking at the daily price chart, silver appears to be in a long-term downtrend, consistently making lower highs and lower lows since it peaked above $121 in January. From May until recently, the price moved lower within a defined downward channel.
Silver prices surged past a key resistance level on Tuesday, hitting a high of $59.25 during the day. This move above the recent downward trendline often suggests the price may now be changing direction, with a potential target around $68.88 based on Fibonacci retracement levels.
As a researcher tracking this asset, I’ve noticed the $68 level is significant – it previously prevented price increases earlier in the year. If we were to reach that point now, it would represent about a 16% gain from where things stand today. However, one of my main concerns is the strength of the dollar; a stronger dollar could negatively impact this potential upward movement.
Double Bottom at $55 and RSI Divergence Back the Recovery
Technical indicators suggest silver prices are likely to rise. The price has rebounded from around $55 twice, a level that also corresponds to a key Fibonacci retracement. This creates a pattern called a ‘double bottom,’ which often signals that a price decline is ending and an uptrend is beginning.
The price also hit a second low point, but this time, the Relative Strength Index (RSI) showed a positive sign. Even though the price went down, the RSI actually moved up, which often means selling is losing strength. Currently, the RSI is around 47, considered neutral, so there’s potential for the price to increase further before it becomes overbought.
The price is expected to continue rising as long as it stays above a certain level. If the price falls back below this level, the anticipated upward trend won’t happen, and it could drop to around $49.81. Some investors might prefer to wait for confirmation of this breakout before buying.
If diplomatic efforts continue to improve and silver stays above $55, it could potentially reach $68. However, if concerns about rising oil prices and inflation resurface, silver’s price could fall back to its lowest point this year.
2026-07-21 19:29