Will silver price hold $55.56 support as higher energy prices spur inflation concern?

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Silver drops 2.32% to $56.43 today

Highlights

Escalating US-Iran tensions and rising energy costs have intensified selling pressure on silver, triggering outflows from the metal.
Despite a weaker US dollar, heightened geopolitical risk in Iran continues to suppress investor demand for silver.
Silver remains in a firmly bearish technical setup, with strong selling momentum and a high probability of further declines toward $55.56–$57.30 in the next few days.

Sentiment deteriorates as Iran tensions and inflation pressures spur outflows

Recent events, including rising tensions between the US and Iran, have driven increased selling pressure on silver, leading to a more risk-off environment in commodities markets, according to Fxstreet. Higher energy prices and renewed inflation concerns have amplified these pressures, worsening sentiment and prompting additional outflows from silver positions. Fxstreet also notes that despite a weaker US dollar, geopolitical risks in Iran have outweighed any supportive impact, further curbing investor appetite for silver.

Bearish momentum persists as key resistance and oversold signals converge

Technically, XAG is positioned below the MA-20 at $57.27, MA-50 at $58.01, and the long-term MA-200 at $76.59. The Ichimoku Kijun stands at $57.65, presenting immediate resistance. On the indicator front, both the Moving Average Convergence Divergence (MACD) and Average Directional Index (ADX) confirm ongoing selling momentum. The Relative Strength Index (RSI) is at 36.21, signaling oversold conditions alongside the Stochastic RSI, Commodity Channel Index (CCI), and Bull/Bear Power readings. The Awesome Oscillator is also consistent with the prevailing downtrend.

Downside favored as volatility bands limit short-term rebound odds

In the short term, silver is likely to consolidate between $55.56 and $57.3 over the next two to three trading days, tracking a typical volatility band relative to current levels. There is a high probability of further downside at 75%, with a 25% chance for a technical rebound. An upward scenario would require a break above $57.65 resistance, while a move below $55.56 support could extend losses further.

Viktoras Karapetjanc, expert at Traders Union, notes that silver remains under pressure due to rising macro risks tied to US-Iran tensions and inflation worries. He sees that current sentiment is fragile, with selling flows dominant as silver trades below key moving averages. The technical environment is still negative, but the oversold conditions suggest a potential for a technical rebound if resistance at $57.65 is cleared. Karapetjanc concludes: "I am constructive on silver’s medium-term path, but further downside is still likely unless $57.65 is broken with strong momentum."

Earlier, analysts noted that downside risks were dominant for silver amid heightened geopolitical and macroeconomic uncertainties. The latest developments reinforce this bearish momentum, with traders now closely monitoring the $55.56 support as a key level that could define the next phase of price action.

Source of Data: XAG Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.