Silver rose to around $74.75 in early European trading on Wednesday. That was up 1.90% on the day, after prices moved back above $74.50. Demand rose as tensions between the US and Iran increased.
Iran’s Foreign Minister Abbas Araqchi said on Tuesday that the US and Iran agreed on the main “guiding principles” in talks over their nuclear dispute. However, he said a deal is not close. US President Donald Trump said Iran will make a deal and warned of consequences if issues are not resolved.
Us Iran Tensions Lift Silver
US inflation data did not change near-term expectations for Federal Reserve rate cuts. Higher rates can limit gains in non-yielding assets like silver. US headline inflation fell to 2.4% year on year in January, down from 2.7% in December. Core CPI rose 2.5%, compared with 2.6% previously.
Markets are watching the FOMC minutes from the January meeting on Wednesday, after the Fed kept rates at 3.50%–3.75%. US markets are also reopening after a long weekend, which could increase volatility.
On the daily chart, XAG/USD was at $73.68. The 20-day EMA was $83.30, and RSI (14) was 42.17. Price remains below the EMA, and momentum is still below the midline.
In early 2025, silver surged above $74. Safe-haven demand linked to US-Iran tensions was a key driver. This lifted prices even though technical indicators looked weak. As of today, February 18, 2026, much of that geopolitical risk has eased, and market conditions have changed.
Volatility And Strategy Outlook
The dovish Federal Reserve outlook we tracked last year played out. Two later rate cuts brought the federal funds rate to 2.75%–3.00%. This followed steady cooling in inflation, with the latest January CPI showing a manageable 2.1% annual rise. This backdrop has reduced support for non-yielding assets compared with a year ago.
For derivatives traders, this has meant lower volatility. The Cboe Silver ETF Volatility Index (VXSLV) peaked above 40 during the 2025 geopolitical flare-ups. It is now closer to 28. Option premiums are therefore much cheaper. That lowers the cost to enter trades, but it also reduces potential returns for premium sellers.
With silver now trading in a tighter range near $65, we think the sharp rallies are likely behind us for now. Selling out-of-the-money call spreads may be a useful income strategy in the coming weeks. This fits the lower-volatility environment and the view that silver may struggle to reach its 2025 highs without a major new catalyst.
We also need to account for fundamentals, which look different from last year. The Silver Institute reports that industrial demand—especially from solar and electric vehicles—reached a record 654 million ounces in 2025. Because of this, it may make sense to use part of the premium earned from selling calls to buy long-dated, out-of-the-money puts. This can help protect against a drop if industrial activity slows unexpectedly.
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