Silver (XAG/USD) recovers modestly on Tuesday, trimming losses after dropping more than 7% during Monday’s thin liquidity session. Heightened geopolitical tensions, combined with expectations that the upcoming Federal Reserve (Fed) minutes will reinforce hopes of further monetary easing in 2026, are providing support to the precious metal.
Geopolitical developments underpin safe-haven demand
Tensions remain elevated across multiple regions. Moscow revised its position on peace talks with Ukraine following an alleged drone attack near President Vladimir Putin’s residence. Meanwhile, military drills around Taiwan in the South China Sea entered a second consecutive day, and US President Donald Trump has threatened potential military action against Iran. These developments are fueling safe-haven flows into Silver.
Fed minutes could shape short-term sentiment
Investors are awaiting the release of the Fed’s December meeting minutes later on Tuesday. Markets anticipate that the minutes will highlight a divergence within the Federal Open Market Committee, sustaining expectations that the central bank may deliver additional rate cuts beyond the 25 basis points projected in its December Dot Plot. Lower interest rates tend to support non-yielding assets such as Silver, reinforcing bullish sentiment in the near term.
Technical outlook: upside limited near $76.50
From a technical perspective, XAG/USD trades around $75.65 after bottoming at $70.53 on Monday. The rising 50-period Simple Moving Average (SMA) near $70.89 acted as support during Monday’s decline and continues to maintain the broader upward trend.
Oscillators show mixed signals. The Moving Average Convergence Divergence (MACD) remains below its Signal line and the zero mark, suggesting caution, while the Relative Strength Index (RSI) has rebounded above 50, indicating bullish momentum.
Immediate resistance is seen around $76.50, followed by the psychological $80.00 level and the all-time high at $85.87. On the downside, support is likely near the 50-period SMA and Monday’s low at $70.53. A break below these levels would open the path toward the December 18 low of $64.75.
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