Ceasefire Talks And Headline Risk
Axios reported talks involving the US and Iran, with regional mediators, about a possible 45-day ceasefire. IRNA later said Iran rejected a ceasefire proposal sent via Pakistan and issued a 10-point response. The proposal was reported to include demands to end conflicts in the region and set terms for safe passage through the Strait of Hormuz. Focus has moved to a deadline set for Tuesday at 8:00 p.m. Eastern Time, with warnings of strikes if the strait is not reopened. Technically, price has been rejected near the 100-day SMA and remains below the 50-day SMA. Resistance sits at $75.84, then $82.35, and the February swing high at $96.62. Support is seen at $70-$68, then $61.01, near the 200-day SMA at $59.24. RSI is 43, while MACD is slightly positive but near zero.Options Strategies For A Volatile Backdrop
We are seeing silver trade sideways around $38 an ounce as traders assess the current geopolitical climate. Market hesitation stems from escalating maritime tensions in the South China Sea, creating a sense of indecision. This feels very similar to what we experienced this time last year. Looking back at this period in 2025, we recall a similar tight range when silver was pinned near $73. The market was whipsawed by conflicting headlines over the US-Iran war and a potential ceasefire. That experience taught us how quickly sentiment can turn on a single news report. Given the uncertainty, we believe establishing long straddles or strangles on silver futures is a prudent approach for the coming weeks. This strategy profits from a significant price move in either direction, which seems likely given the fragile situation. The Precious Metals Volatility Index (PMVIX) supports this view, having climbed 15% to 32.5 in the last two weeks. For those with a slight bullish bias, a call ratio spread could offer a low-cost way to position for an upside break. We have seen call option open interest on the May silver contracts with a $40 strike jump by 25% this past week, indicating an upside hedge. This allows traders to capitalize on a sudden de-escalation or a flight-to-safety rally. We must not ignore the downside risk, as the stalemate could easily break the other way. The memory of silver testing the $61 level during the 2025 crisis serves as a sharp reminder of how quickly support can vanish. Buying protective puts or using bear put spreads to hedge long positions seems wise, especially as the latest CPI data makes a supportive Fed pivot unlikely. Create your live VT Markets account and start trading now.
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