Silver prices seesaw on disputed US-Iran deal signals ahead of midterms

Silver prices jumped yesterday after positive news from the US-Iran talks. According to Al-Arabiya, a "compromise proposal" from Qatar and Pakistan met both nations' demands, and the Pakistan army chief delivered a plan that had US and Iran approval. The proposal included a partial response to Iran's frozen funds demand.

Optimism that a deal was near initially boosted markets, but sentiment shifted after a diplomat involved in the discussions said that talks were continuing and that claims of a deal being close were unfounded.

Nevertheless, markets maintain some optimism owing to the recent surge in positive reports and the approaching midterm elections. Trump may seek at least a short-term deal to lower energy prices and Treasury yields while supporting the stock market.

Should a breakthrough occur, silver is expected to rally in the near term as inflation and rate hike worries ease.

Friday's US Flash PMIs data could also act as a catalyst. With recent growth fears, disappointing numbers could intensify those anxieties, pushing long-term Treasury yields downward and potentially supporting silver in the short term. Conversely, strong data could alleviate those concerns and pressure silver as real yields would likely increase.

Silver Technical Analysis: Daily Timeframe

Silver broke below the trendline as sellers moved in to arrange a decline to fresh lows. Sellers are anticipated to maintain pressure on the trendline, with a clear risk above, to sustain the push toward lower levels. To open the path to new highs and target a correction toward the next trendline near the 62.00 level, buyers require a breakout above this trendline.

Silver Technical Analysis: 4-Hour Timeframe

An upward trendline highlights the recent retracement. Buyers are likely to lean on this trendline, with a defined risk below, to set up for a rally toward the next major trendline around 62.00. Sellers, conversely, will seek a break lower to amplify bearish positions toward new lows, initially aiming for the 54.75 level.

Silver Technical Analysis: 1-Hour Timeframe

There is limited additional insight: buyers have a more favorable risk-to-reward setup near the upward trendline, while sellers will aim for a breakout to prolong the decline to fresh lows.

Potential Catalysts Ahead

US Jobless Claims figures arrive on Thursday, followed by the US Flash PMIs on Friday.