Silver (XAG/USD) fell to about $70.60 in early European trading on Thursday. The move followed comments by US President Donald Trump about the Iran conflict.
Trump said in a televised White House speech that his core “objectives are nearing completion” in Iran. He also said the US would hit Iran “extremely hard” for the next two to three weeks.
Market Reaction And Rate Impact
The remarks lifted crude oil prices and lowered expectations for interest-rate cuts. Silver is often used during geopolitical uncertainty, but it does not pay interest, which can reduce demand when rates stay high.
On the daily chart, the near-term bias turned bearish after silver moved below the 100-day exponential moving average near $73.80. The RSI stands at 40.97, below 50, and has weakened after dropping from the mid-80s area.
Resistance is seen at $73.80, with the Bollinger middle band near $76.25. A move above that zone could reopen the $80.00 area.
Support sits around $68.00, then $65.00. A break below $65.00 would bring the lower Bollinger Band near $63.20 into view.
Strategy Implications And Trade Setups
Given the sharp drop to the $70.50 area, the immediate outlook for silver has turned negative, and our strategy should reflect this shift. The break below the 100-day moving average is a significant technical signal that suggests more downside is likely. Traders should consider buying put options with strike prices near the initial support level of $68.00 to capitalize on this downward momentum.
The geopolitical situation creates high uncertainty, which means elevated volatility is almost a given for the next few weeks. While the primary trend is down, sharp reversals are possible, making outright short futures positions risky. For those expecting a large price swing but unsure of the direction, purchasing a long straddle could be a prudent way to play the upcoming volatility.
Looking at the bigger picture, the Gold/Silver ratio now sits near 55:1, which is historically low when we look back at the averages in 2025 that were closer to 70:1. This suggests silver may be overvalued relative to gold, adding fundamental weight to the bearish technical signals we are seeing. This disparity supports strategies that favor gold over silver or outright short silver positions.
With expectations for interest rate cuts diminishing, the environment is becoming less favorable for non-yielding assets. This gives us confidence in selling out-of-the-money call options or implementing bear call spreads with the upper strike placed above the strong resistance at $73.80. These strategies will profit from price declines, sideways movement, and decreasing volatility if the situation stabilizes.
Industrial demand presents a mixed but important picture that we cannot ignore. While data from late 2025 showed a continued surge in solar panel manufacturing, which uses significant amounts of silver, recent reports from the World Semiconductor Trade Statistics show a slight cooling in global electronics demand. This could remove a key pillar of support for silver prices if the trend continues through this quarter.
The latest Commitment of Traders report confirms this bearish sentiment, as it shows institutional investors or “managed money” have been reducing their net long exposure to silver for three consecutive weeks. This indicates that larger market participants were already positioning for a downturn before this recent price break. We should view any rally toward the $73.00 mark as an opportunity to join this trend.
