Silver rallies to fresh weekly high, above $77.00 as USD plummets on US-Iran ceasefire

Silver (XAG/USD) rallies to a fresh weekly high during the Asian session on Wednesday, with bulls now looking to build on the momentum beyond the $77.00 mark amid a broad-based US Dollar (USD) selloff.

US President Donald Trump announced last Tuesday that he would suspend planned military strikes against Iran for two weeks, subject to Tehran agreeing to fully reopen the Strait of Hormuz. In response, Iran stated that it has accepted a two-week ceasefire, with negotiations set to begin on Friday in Islamabad, Pakistan. The optimism boosts investors' confidence and weighs heavily on the Greenback, which, in turn, is seen benefiting the USD-denominated commodities, including Silver.

Meanwhile, Iran’s foreign minister added that safe passage through the key waterway will be possible for a period of two weeks, triggering a steep decline in Crude Oil prices. This helps ease inflationary concerns and tempers Federal Reserve (Fed) rate hike bets, exerting additional pressure on the USD and further benefiting the non-yielding white metal. However, the lack of follow-through buying warrants some caution for the XAG/USD bulls before positioning for further gains.