Silver rose for the third straight day on Friday as safe-haven demand increased amid rising US-Iran tensions. XAG/USD traded near $82.80 and was on track for a weekly gain of more than 5%.
Prices rebounded after slipping to near two-week lows earlier in the week. The rally continued even as the US Dollar strengthened.
Rising Middle East Tensions
Tensions increased after the United States boosted its military presence in the Middle East. On Friday, President Donald Trump said he was considering a limited strike on Iran.
On Thursday, Trump said Tehran must reach a “meaningful deal” or face “bad things.” He added that he expected more clarity on a new nuclear agreement within 10 to 15 days.
Other supportive factors included steady institutional inflows, solid industrial demand, and expectations for lower US interest rates later this year. The short-term technical outlook also improved on the 4-hour chart.
Price hovered near the upper Bollinger Band as the bands began to widen, which signals higher volatility. MACD stayed above the Signal line in positive territory, and the histogram continued to widen.
Technical Levels And Trade Plan
RSI held near 66, still below overbought territory. A break above $82.39 could open the door to $86.00, followed by resistance near $92.00.
Immediate support was at the 20-period SMA at $77.34. Below that, key levels to watch were $72.16 and then $64.00.
Bullish momentum in silver appears to be building, similar to last year when geopolitical risks jumped. Price is pushing against the upper Bollinger Band, so traders should expect more volatility and potential upside. With MACD and RSI showing steady upward strength, buying on small dips looks like the preferred approach in the weeks ahead.
The setup also feels familiar. Tensions in the Red Sea are lifting safe-haven demand, much like the US-Iran flare-ups did in 2025. This ongoing geopolitical risk premium helps support silver prices. The market is also showing strength by rising even with a relatively firm US Dollar.
Fundamentals continue to back the bullish case. Industrial demand for silver, led by solar panels and electric vehicles, reached a record 632 million ounces in 2023 and still looks strong. This demand provides meaningful long-term support.
Monetary policy expectations are also becoming a major driver. January US inflation remained sticky at 3.1% year over year, yet markets are still pricing in Federal Reserve rate cuts later this year. Lower rates would likely weaken the dollar and make non-yielding assets like silver more attractive.
With momentum improving, call options could be a way to benefit from a move to higher prices. Options expiring in the next 45 to 60 days may help capture this expected move. This approach offers upside exposure while keeping risk capped.
Even so, risk management remains essential. A clear break below the 20-period moving average would be an early sign to cut long exposure. Stop-loss orders or protective put options can also help protect against a sharp reversal if global tensions ease.
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