Silver Price Forecasts: XAG/USD eases below $78.00 but maintains a mild bullish stance

Silver (XAG/USD) failed to breach resistance at the $79.00 area earlier on Monday, but remains moderately bid, trading in the mid-$77.00s at the time of writing. Hopes of a US-Iran peace deal are weighing on the US Dollar in a calm Monday trading session and are keeping precious metals buoyed for now.

Investors are clinging to hopes of a negotiated end to the Middle East conflict, despite contradictory messages from US President Donald Trump. Trump suggested on Saturday that a deal is close, before affirming on Sunday that the US will maintain the blockade of the Strait of Hormuz until an agreement is reached and that he told negotiators “not to rush into a deal”.

Apart from that, markets are calm with trading volumes subdued amid a long weekend in the US and UK, due to the Memorial Day bank holiday.

Technical Analysis: A bullish Head and Shoulders hints at a deeper correction

XAG/USD trades at $77.51, with the near-term bias showing a mildly bullish stance, and price action forming an inverted Head & Shoulders figure, with key resistance at the $79.00 area.

Momentum indicators are also supportive, with the Relative Strength Index (RSI) hovering in the mid-50s and the Moving Average Convergence Divergence (MACD) holding in positive territory, hinting that dips could remain shallow while supports are respected.

The resistance area between the May 19 high, at the $78.90 area, and the 38.2% Fibonacci retracement of the mid-May bearish cycle, around $79.20, is the main challenge for bulls. A breach of that area would shift the focus towards the $80.00 psychological level and a previous support zone, at $83.00, which is also the 61.8% Fibonacci retracement of the previously mentioned cycle.

On the downside, the May 21 highs around $77.00 are providing support so far on Monday ahead of Friday's low in the area of $75.00. Key support is the May 19 low near $73.10.

(The technical analysis of this story was written with the help of an AI tool.)