Silver (XAG/USD) fell for a second day on Friday as the US Dollar stayed firm and expectations of a quick end to the Middle East conflict eased. It traded at $74.65 after touching a 10-day low of $73.95, and was on track for a near 7% weekly drop.
Precious metals stayed weak amid a deadlock in the US-Iran peace process, which supported demand for the US Dollar. A ceasefire remained on hold, while cargo vessel seizures by the US and Iran added strain.
Middle East Tensions And Oil Risks
These events reduced the chances of an early reopening of the Strait of Hormuz and kept crude oil prices elevated, adding recession risk. In technical trading, XAG/USD broke below an upward channel from late March and extended losses from around $78.50.
The RSI was close to oversold, while MACD stayed negative. Support was seen at the 38.2% Fibonacci retracement at $74.60, with further levels between $72.61 and just above $72.00, and resistance near $75.60 and $78.60.
Silver is used as a store of value and is traded via physical holdings or ETFs. Prices can be affected by the US Dollar, interest rates, geopolitics, inflation, mining supply, recycling, industrial demand such as electronics and solar, and moves in gold and the gold/silver ratio.
We’re seeing silver remain on the defensive, trading around $74.65 as continued US-Iran tensions push investors toward the US Dollar. The Dollar Index (DXY) is currently holding firm above 107.50, its highest level this quarter, which naturally puts pressure on dollar-priced assets like silver. This dynamic is a direct result of failed de-escalation in the Strait of Hormuz, keeping markets on edge.
Options And Positioning Ideas
From a technical perspective, now that we have broken the upward channel from late March and failed to hold the $78.50 support level, sellers are in control. Our next logical targets are the April 12 low at $72.61 and the support area just above $72.00. Given this momentum, we should consider buying put options with strike prices near $73.00 to position for further declines over the next few weeks.
This bearish view is reinforced by recent data showing a 3% slowdown in industrial silver demand for the first quarter of 2026, primarily due to slower growth in electronics manufacturing. The latest Commitment of Traders report also revealed that managed money has reduced its net-long silver positions for the third consecutive week. This signals that large speculators are losing their conviction in the upside for now.
We are also watching the Gold/Silver ratio, which has climbed to 88:1, a level we haven’t seen since late 2025. While a high ratio can suggest silver is undervalued relative to gold in the long term, the immediate trend is clearly downward. This pattern is reminiscent of the consolidation period in late 2024, where silver gave back some of its gains before finding a new floor.
With US inflation data last week showing a persistent 3.1% annual rate, expectations for near-term interest rate cuts by the Federal Reserve are diminishing. As a non-yielding asset, silver will likely struggle to attract buyers in this higher-for-longer rate environment. This makes selling out-of-the-money call options above the key $78.60 resistance a viable strategy to collect premium while the price remains subdued.
