Silver Price Forecast: XAG/USD drifts below $70.00 as hopes of ceasefire in Middle East wane

LONDON (March 26) Silver (XAG/USD) is trading lower for the second consecutive day on Thursday, testing levels below the $70.00 psychological level at the time of writing. The precious metal is losing the positive momentum seen earlier this week, as the US Dollar (USD) picks up with market hopes of a ceasefire in the Middle East starting to wane.

Iran has rejected the 15-point plan proposed by the US to end the war in the Middle East and denied intentions of holding negotiations with Washington. An anonymous official from the Islamic Republic also affirmed in an English-language broadcasting TV that Iran’s government has its own demands for a peace deal, AP reports.

Meanwhile, drones and missiles continue flying in the region, and the Strait of Hormuz, a bottleneck for approximately a fifth of the global Crude output, remains effectively locked. This is strangling the global economy and hammering investors' appetite for risk. In this context, the US Dollar is reemerging as a safe-haven asset.

Technical Analysis: Silver remains within a bearish channel

The 4-hour chart shows XAG/USD trading at $69.35 amid a mildly bearish near-term bias. The 50-period Simple Moving Average (SMA), now near $73.40, is keeping price action aligned with the broader downside structure.

The Relative Strength Index (RSI) has retreated from above 50 back toward the mid-40s, while the Moving Average Convergence Divergence (MACD) green histogram bars contract after a prior positive phase, which supports the bearish scenario.

The downward parallel channel from above $90, now around the the $73.00 level, emerges as first resistance ahead of the stronger $74.70 area, where the pair was held on March 20 and 25. On the downside, initial support is seen around $69.00, ahead of the more significant horizontal level at $65.96, and the recent swing low, in the area of $60.50.

FXStreet