Silver (XAG/USD) was down 0.7% near $72.50 in late Asian trade on Monday, moving in a tight range. Price action stayed subdued ahead of Iran’s response to an ultimatum from US President Donald Trump.
Trump said the US would attack Iranian power plants and bridges if Iran does not free the Strait of Hormuz by Tuesday at 8:00 PM ET. Iran’s foreign ministry said it will not reopen the passage and warned it would respond by targeting similar infrastructure owned by, or linked to, the US.
Axios, cited by Bloomberg, reported talks between the US and Iran about a 45-day ceasefire. Such an outcome would reduce geopolitical risk, which can lessen demand for safe-haven metals.
War-related inflation expectations and tighter central bank policy guidance have also weighed on non-yielding assets such as silver. Markets are also watching the US Federal Open Market Committee minutes from the March meeting, due on Wednesday.
Technically, silver traded near $72.50 with a mildly bearish bias below the 20-day EMA. Resistance sits near $75.20, with support around $70.00, then $66.70 and $61.00; RSI was 43.
The immediate focus is the extreme uncertainty surrounding the Strait of Hormuz deadline tomorrow. We see conflicting signals between a direct military threat and back-channel talks of a ceasefire, creating a binary event for silver prices. This environment suggests that using options to define risk, rather than trading spot futures, is the prudent approach for the next 48 hours.
Traders anticipating a de-escalation or a ceasefire could consider buying puts with strikes below the $70.00 support level. Conversely, those positioning for a conflict could look at buying calls, though high implied volatility will make them expensive. A more cost-effective strategy for a bullish move would be a call spread, such as buying a $75.00 call and selling an $80.00 call to cap costs.
We saw a similar dynamic play out during the flare-ups of 2025, where geopolitical events caused sharp, but often short-lived, rallies in precious metals. Looking back, we saw the Cboe Silver ETF Volatility Index (VXSLV) spike over 40% in a single week during the October 2025 tensions, only to retreat once the market’s focus returned to central bank policy. The current situation feels very similar, where the initial reaction will be sharp before fundamentals take over again.
Once the geopolitical noise settles, attention will shift to Wednesday’s FOMC minutes. Given the ongoing war-fueled inflation, any hints of a more hawkish Fed will likely pressure non-yielding silver lower. We need to watch for language suggesting that rates will remain higher for longer to combat the persistent inflation, which has been running above 4.5% for the last two quarters.
From a technical standpoint, the $75.20 level is the key line to watch for any change in the bearish trend. A failure to break above it could embolden traders to sell call options with strikes around that level. Should silver prices fall and test the $70.00 support area, it may present an opportunity to sell cash-secured puts for those willing to get long at a lower price.
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