Silver (XAG/USD) fell during the Asian session on Monday to the lower end of its recent range. It traded above $68.00 and was down nearly 2.0% on the day.
The US-Iran conflict moved into its fifth week, with reports of rising military activity supporting the US Dollar as a safe haven. The Washington Post said the Pentagon is preparing for weeks of ground operations in Iran, including possible raids on Kharg Island and coastal sites near the Strait of Hormuz.
Iran’s parliament speaker, Mohammad Bagher Ghalibaf, said Iranian forces are ready to retaliate if US troops are deployed on the ground. Yemen’s Iran-aligned Houthis said they launched two missiles at Israel within 24 hours and warned of more attacks, raising concerns about trade flows through the Bab el-Mandeb Strait.
Higher oil prices have added to inflation concerns and expectations of a more hawkish Federal Reserve. Markets have now fully priced out further US rate cuts and are increasing bets on a hike by the end of this year, which has supported the Dollar and pressured non-yielding silver.
Technically, silver has traded in a range after breaking below the 100-day simple moving average, which points to downside risk. Traders may still wait for a clear break below the range before expecting further falls.
Looking back at the analysis from 2025, we recall a period where silver was being sold off heavily due to rising geopolitical tensions in the Middle East. Now, in late March 2026, the diplomatic channels that opened in late 2025 have significantly reduced those specific conflict risks, calming the market. This fundamental shift away from a crisis footing has changed the entire landscape for precious metals.
The fears of a hawkish Federal Reserve that dominated 2025 have faded as oil prices stabilized below $80 a barrel throughout early 2026. With recent US inflation data showing a consistent trend towards the Fed’s target, hovering at 2.5% last month, the dollar has softened considerably. This has led the futures market to price in a 75% probability of at least two rate cuts before the end of this year, which is typically bullish for non-yielding assets like silver.
This shift in fundamentals suggests a change in strategy for derivative traders who were previously bearish. We see value in establishing long positions through call options, particularly those with expirations in the third quarter to capture the expected upward move driven by monetary policy easing. The environment is no longer favorable for holding short positions or buying puts.
This view is supported by recent Commitment of Traders (CFTC) reports, which show managed money accounts have been steadily increasing their net-long exposure in silver futures. This is a stark reversal from the defensive, net-short positioning we saw for much of the second half of 2025. The flow of institutional money now points towards renewed confidence in silver’s appreciation potential.
From a technical standpoint, the bearish breakdown below the 100-day Simple Moving Average in 2025 has proven to be a bear trap. Silver has since reclaimed that level, which is now acting as strong support around the $30.50 mark, and we are seeing a bullish consolidation pattern forming. Traders should view any dips towards this moving average as a buying opportunity rather than a reason to sell.
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