Silver (XAG/USD) remains under pressure close to the bottom of its range from the past week, staying above $68.00

Silver Price Drops Amid Heightened Geopolitical Tensions

Silver (XAG/USD) experienced renewed selling pressure during Monday's Asian trading hours, falling toward the lower boundary of its recent trading range. The precious metal remains above $68.00 but has declined nearly 2% today, indicating a risk of further losses.

Escalating military actions between the United States and Iran, now in their fifth week, have unsettled investors and strengthened the US Dollar’s position as the world’s reserve currency. This has negatively impacted commodities priced in USD, including silver. According to the Washington Post, the Pentagon is preparing for extended ground operations in Iran, which may involve raids on Kharg Island and coastal areas near the Strait of Hormuz.

Iranian parliament speaker Mohammad Bagher Ghalibaf stated that Iranian forces are prepared to respond if US troops are deployed. Meanwhile, Yemen’s Houthi group, aligned with Iran, claimed two missile attacks on Israel within 24 hours and warned of additional strikes in the near future. Their involvement increases the threat of disruptions to global trade routes passing through the Bab el-Mandeb Strait in the Red Sea.

These developments are expected to support higher crude oil prices, intensifying inflation concerns and reinforcing expectations for a more aggressive policy stance from the US Federal Reserve. Market participants have now largely dismissed the likelihood of further rate reductions by the Fed, with speculation mounting about a possible rate hike before year-end. This outlook further boosts the US Dollar and puts additional pressure on silver, which does not yield interest.

From a technical standpoint, silver’s current sideways movement may be viewed as a bearish consolidation, especially after its recent drop below the 100-day Simple Moving Average. This supports a pessimistic forecast and suggests that silver’s most probable direction is downward. However, it remains wise to wait for a clear break below the established range before anticipating further declines.