Silver prices have fallen sharply from nearly $86.00 to below $75.00. This drop comes after US President Trump, alongside Ukrainian President Volodymyr Zelenskyy, suggested that peace in Ukraine might be on the horizon, which has affected precious metal prices. The decrease in silver below $75.00 is also driven by increased optimism for a peace agreement in Ukraine. On the other hand, rising tensions between China and Taiwan—like military exercises and Chinese ships near Taiwan—could influence the market trends for silver. Looking at the technical details, XAG/USD is currently trading at $74.92 on a 4-hour chart. It is nearing the 21-period Simple Moving Average (SMA) at $74.00, which acts as support. The Relative Strength Index (RSI) is around neutral at 54.79, while the MACD is declining, indicating less momentum. Support levels under the SMA include $72.60 and the range between $69.60 and $70.20. Resistance is noted at $80.00, with an all-time high of $85.87. This analysis utilized an AI tool, and the article was updated for the correct spelling of President Volodymyr Zelenskyy. The significant drop in silver—from its recent peak near $86 to below $75—creates a complicated situation for traders. While hopes for a peace deal in Ukraine are pushing prices down, we also need to consider the rising geopolitical risks from China and Taiwan. This creates a conflict between possible easing in Europe and escalating tensions in Asia. For those expecting further declines, buying put options with strike prices close to the $72.60 support level is a straightforward way to take advantage of this trend. This bearish outlook is backed by the latest Commitment of Traders report, which showed that large speculators cut their long silver positions by nearly 15% last week. This indicates that institutional investors are growing cautious after recent highs. However, the increasing military activities around Taiwan can’t be overlooked, as they could quickly reverse silver’s downward trend. Reports show that maritime insurance fees for vessels passing through the Taiwan Strait have risen over 25%, reflecting a significant market risk. This makes buying call options a viable strategy for those predicting that Asia’s geopolitical risks will outweigh positive developments in Europe. With these two strong but conflicting dynamics in play, we’re experiencing high implied volatility in silver options, making strategies like long straddles appealing. This approach allows us to benefit from significant price movements in either direction without needing to predict which way the market will go. Reflecting on market reactions to the initial conflict in 2022, it’s clear that volatility was constant as geopolitical news unfolded rapidly. For those of us with long silver positions, buying puts can be a wise way to protect against a drop toward the solid support level around $70.00. Key to watch in the near term is the 21-period moving average near $74.00. A clear break below this could indicate that the bearish momentum from the peace discussions is stronger than the bullish influence from the Taiwan situation.

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