Silver dips slightly as US-Iran-Israel conflict drives historic oil supply shock

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Silver down 0.58% today at $83.95

Highlights

Escalating US-Iran-Israel conflict has pushed oil above $100, nearly closed the Strait of Hormuz, and caused unprecedented global supply disruption.
Central banks, led by the Fed, have paused rate cuts amid an energy shock, strengthening the US Dollar and heightening inflation risk.
Silver faces high short-term volatility with seller pressure dominating, but a strong probability of sideways-to-bullish movement toward $89.00 this week.

Energy supply shock strengthens dollar amid conflict and trade disruptions

The escalation of conflict between the United States, Iran, and Israel has driven oil prices above $100 per barrel, triggered major port closures in Iraq, and led to threats by Tehran to push oil prices to $200 per barrel if tensions persist, resulting in the near-total closure of the Strait of Hormuz and the largest disruption in global oil trade in history. The energy supply shock and persistent war risk have caused central banks, particularly the United States Federal Reserve, to signal an indefinite pause on rate cuts, strengthening the US Dollar and increasing inflation uncertainties. Temporary waivers on sanctions for Russian oil have been enacted to stabilize global supply, overriding existing trade restrictions amid acute shortages. Persistent de-globalization, renewed trade wars, and increased state intervention in energy and commodity supply chains have further amplified global macroeconomic volatility.

Bullish MACD contrasts weak trend signals in volatile trading

Technical indicators for XAG are mixed: while the daily MACD displays strong bullish momentum, the ADX is low at 22.39 and issues a Sell signal, indicating weak trend strength. RSI is neutral at 47.99, as are the Stoch RSI and CCI (near -47), reflecting the absence of clear overbought or oversold conditions. The BBP, at 1.83, classifies conditions as overbought, suggesting buyers dominated earlier trading, but a significant gap up at the open was followed by a move toward the lower end of the day's $81.74 – $87.40 range, demonstrating high intraday volatility. Despite earlier buyer momentum, price action later in the day was dominated by sellers, and headline indicators offer no clear directional signal.

Upside probability rises as technicals limit risk of deeper decline

For the upcoming week, typical volatility suggests a price band for XAG/USD between $80.00 and $89.00, consistent with recent movements and current levels. The probability of a price increase is assessed as greater than 80%, based on consistently bullish readings from weekly RSI, ADX, MACD, and MA-50, which makes further major declines less likely in the immediate term. The baseline scenario is for silver to trade sideways above its recent support levels. In the bullish case, a break above $84.90 may see a move toward $89.00, while if $81.74 – $80.00 fails to hold, a deeper pullback toward long-term support could occur, though short-term selling is likely to be contained above this zone.

Viktoras Karapetjanc, analyst at Traders Union, sees silver’s long-term trend as supported by robust fundamentals, despite recent selling pressure from near-term technicals. He believes that macro drivers — especially geopolitical tensions and oil shocks — are fueling volatility and sustaining bullish sentiment. Technical signals are mixed, but supportive weekly trends provide a constructive backdrop. Karapetjanc expects sideways-to-upwards price action as long as support holds. "Market momentum favors further gains for silver, and I expect buyers to regain control so long as the $80.00 support zone is not lost."

Last time, analysts noted that silver stabilized near recent highs after a sharp midweek reversal, with buyers returning but immediate upside momentum still capped by resistance just below the previous peak. Technicals show support around $85-$84.50 and resistance near $88, with the metal remaining well above year-start levels as elevated volatility persists amid strong oil prices, a firm dollar, and high Treasury yields.

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

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