Silver price rebounds near $69, but the chart still has a warning sign

Silver rose in Asian trade on Thursday, but the move looked more like a cautious recovery than the start of a clean breakout. XAG/USD traded near $69.15 an ounce as lower oil prices eased inflation concerns following the US-Iran interim agreement.

The metal drew support from the broader precious-metals rebound, with gold also recovering after Wednesday’s Fed-driven slide.

Still, the upside remains constrained as the Federal Reserve left rates unchanged, but its projections revived the possibility of another increase later this year.

Oil relief supports the rebound

The immediate boost came from a softer energy market.

The US-Iran memorandum has raised hopes that oil flows through the Strait of Hormuz can normalise, reducing fears that fuel costs will keep inflation sticky.

That helped precious metals recover after a volatile session.

The analysts said that the pullback in oil prices had eased some upward pressure on interest rates and cooled rate-hike expectations.

That logic has supported silver as well as gold, because lower expected yields reduce the opportunity cost of holding metals.

The relief, however, is not absolute as the agreement extends a ceasefire by 60 days and leaves major issues for future talks.

That keeps a small geopolitical premium in the market, but not enough to overpower the rate story.

Technical picture still favours sellers

Silver’s chart remains fragile despite the latest bounce. Prices are still below the 100-day simple moving average, while the relative strength index is holding below the midline around 45.

That suggests momentum is improving, but not strongly enough to confirm a bullish reversal.

The first resistance level sits at $70.00, a psychological barrier that traders will watch closely.

A break above that mark could open a move towards the Bollinger middle band near $71.45. Beyond that, the 100-day average around $77.62 remains the larger technical hurdle.

On the downside, the June 17 low near $66.81 is the first support zone. If that gives way, attention could shift towards the lower Bollinger band around $63.15.

As long as silver trades between $66.81 and $70.00, the market may remain trapped in a choppy recovery phase.

Source: TradingView

Deficit story offers longer-term support

The short-term picture is dominated by Fed pricing, but silver still has a stronger structural base than many metals.

The Silver Institute expects the market to remain in deficit for a sixth straight year, helped by firm investment demand even as high prices weigh on jewellery and silverware demand.

That split explains the current tension. Financial investors are willing to buy dips when inflation worries ease, but industrial users are more price-sensitive.

For now, silver’s rally needs confirmation from both sides: a break above $70.00 on the chart and a calmer rates backdrop from the Fed.