Silver (XAG/USD) traded almost flat above $74.00 after falling to $72.61 earlier in the session. Precious metals eased after US-Iran talks ended without agreement and Donald Trump threatened to block the Strait of Hormuz, supporting the US Dollar.
US negotiators said Iran’s refusal to stop enriching uranium remained a red line. A two-week ceasefire is still in place, leaving the door open to further talks.
Near Term Focus Shifts To Us Ppi
The calendar is quiet on Monday, with focus turning to the US Producer Prices Index (PPI) for March on Tuesday. The release follows Friday’s Consumer Price Index (CPI) report and is expected to reflect inflation pressure linked to the Iran war.
Technically, silver is holding above the lower edge of a rising channel from late March, but momentum has weakened. The 4-hour RSI has moved below the midline and the MACD is negative.
A break below the channel base near $73.50 would fit a Bearish Flag, with an initial target near $61.00 (March 23 low). Support is also noted at $68.20 to $69.80, while resistance sits at $77.65, $81.13, and around $85.00.
Looking back at the analysis from April 2025, we can see the market was concerned about a potential breakdown in silver below $74.00. The focus at that time was on a strong dollar fueled by geopolitical tensions with Iran and a hawkish Federal Reserve. This bearish outlook was based on a technical flag pattern that suggested a sharp drop was possible.
How The 2025 Setup Evolved
That bearish flag formation ultimately failed as support in the low $70s held throughout the spring of 2025. The anticipated escalation in the Strait of Hormuz did not materialize, causing the dollar’s safe-haven bid to fade. Consequently, the market’s attention shifted away from geopolitics and toward economic fundamentals.
By late 2025, inflation showed clear signs of cooling, with the annual CPI rate falling to 3.1% in the fourth quarter from its mid-year highs. This data prompted the Federal Reserve to signal a pause in its rate-hiking cycle, which has now turned into active discussions of rate cuts for the second half of 2026. A weaker dollar environment is fundamentally supportive for precious metals.
Furthermore, silver’s industrial demand has significantly outpaced expectations. Recent data from the Silver Institute shows that global demand from the solar panel industry grew by over 15% in 2025, a trend that is accelerating this year. This robust industrial use case provides a strong floor for silver prices, independent of investment flows.
The Gold/Silver ratio, which was hovering near 85:1 in early 2025, has since compressed to 76:1. This shows that silver has been outperforming gold, largely due to its critical role in green energy and electronics manufacturing. We see this trend continuing as industrial demand remains a primary price driver.
Given this shift, derivative traders should adjust their strategies from the bearish bias of last year. We believe buying call options on price dips offers a low-risk way to capture the renewed upside momentum. Selling cash-secured puts at established support levels, such as the $78-$80 range, could also be an effective strategy to collect premium while waiting for a potential entry point.
