Silver Price Forecast: XAG/USD holds gains near $78.50 on US-Iran deal optimism

• Silver advances due to y easing inflation and interest rate concerns due to optimism over a potential US-Iran agreement.

• The United States and Iran are close to signing a 60-day ceasefire extension agreement.

• Fed Governor Waller signaled the central bank should drop its easing bias, complicating the global economic landscape.

Silver price (XAG/USD) rises nearly 4% after registering losses in the previous day, trading around $78.50 per troy ounce during the Asian hours on Monday. Non-yielding assets, including Silver, are receiving support from increasing optimism over a potential US-Iran agreement, which has eased broader market concerns about inflation and impending interest rate hikes.

According to a report by Axios citing a US official, the United States (US) and Iran are close to signing an agreement that involves a 60-day ceasefire extension. Under this proposed deal, the Strait of Hormuz would be reopened, and Iran would agree to clear mines it deployed in the waterway while allowing ships to pass freely. In exchange for these actions, the United States would lift its current blockade on Iranian ports.

However, complications remain, as Reuters reported, citing Iran’s Tasnim news agency, that the US government is still obstructing certain clauses of the agreement to end the conflict, specifically regarding the release of blocked Iranian assets. Further tempering immediate expectations, US Secretary of State Marco Rubio informed the New York Times that while an agreement with Iran has garnered regional support, a comprehensive nuclear deal could not be achieved quickly or carelessly.

Meanwhile, investors are continuing to assess the future outlook for Federal Reserve (Fed) policy. This caution comes after Federal Reserve Governor Christopher Waller signaled that he no longer believes the central bank should retain an easing bias in its official policy statement, adding another layer of complexity to the global economic landscape.