Precious metals started the week on a strong note, with silver rising to a two-month high, despite fresh setbacks surrounding US-Iran peace talks.
Spot silver surged as much as 7% to nearly $86 an ounce, as the white-colored metal looks to break above a downward trend that had emerged since the Middle East war started at the end of February. Gold edged slightly higher by about 0.4%, as investors digest new geopolitical and macro developments.
The moves came amid stalled progress in talks to end the 10-week-long conflict, with Iran rejecting the latest US proposal, followed by US President publicly denouncing the Islamic Republic's response.
Trump’s rejection of Iran’s latest proposal shows that his priority appears to be curbing Iran’s nuclear ambition, which means “either further escalation in the Middle East or stalling talks at best,” Priyanka Sachdeva, an analyst at Phillip Nova Pte, told Bloomberg.
As a result, gold prices could continue to be “directionless despite extreme volatility across global markets," she added.
Silver technicals improve
Meanwhile, silver could be turning a leaf, as some analysts point to improved technicals on the more volatile precious metal. Over the last six weeks, silver has risen back above two key technical analysis levels, according to those from Reuters.
Surpassing the April peak on a sustainable basis would indicate that silver has secured a foothold in a higher range and increase market expectations that it could climb to $90, which is considered an important psychological, says Reuters analyst Christopher Romano.
Breaking above the April high would also end the string of lower highs that has characterized the price trend in silver since the January tumble, he added, noting that lower highs are "considered a negative trend in technical analysis."
Since peaking at $121/oz. in late January, silver has lost more than a quarter of its value, though it remains up by 5% on the year.
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