Silver Price Forecast: Spot Surges to $84.50 as US Submarine Sinks Iranian Warship in Indian Ocean
Silver is back in the midst of some wild price action. As of today, Thursday, the 5th of March 2026, we're seeing a very decisive rebound...
Quick overview
- Silver prices have rebounded to $84.50 an ounce, up 1.3%, amid escalating tensions in the Middle East.
- A US submarine's attack on an Iranian warship has intensified the conflict, leading to the closure of the Strait of Hormuz and rising oil prices.
- The COMEX is facing a delivery crunch with low silver inventory and high open interest, raising concerns of a potential market meltdown.
- Analysts predict a volatile market for silver, with targets ranging from $81 to $135 for 2026, driven by ongoing supply deficits and industrial demand.
Silver is back in the midst of some wild price action. As of today, Thursday, the 5th of March 2026, we’re seeing a very decisive rebound, with spot prices now at $84.50 an ounce, up a healthy 1.3% following all the chaos that’s erupted in the Middle East.
It’s been a real rollercoaster ride for the market over the past few days, but the early week dip towards $79 all but vanished when a US submarine torpedoed an Iranian warship off the coast of Sri Lanka. To put it bluntly, this naval engagement has made it clear that there’s no quick fix in sight for this conflict.
The whole Strait of Hormuz situation is now officially a no-go zone – and the impact on commodity prices is showing. We’re seeing silver outperforming gold in a major way as investors pile into hedges against regional turmoil.
The War Just Got A Whole Lot Bigger: Operation Epic Fury Spills Over into India
We’re now at day six of the conflict and it’s plain as day that the whole thing has taken on a life of its own.
- Naval Attack: In a move that’s got everyone talking, a US submarine reportedly sank an Iranian warship off the coast of Sri Lanka, killing at least 80 sailors. Defense Secretary Pete Hegseth called it a “first of its kind” attack since World War II – and it’s clear that this conflict is getting a whole lot more complicated by the day.
- Turkey & NATO: Meanwhile, in another escalation, a NATO air defense system intercepted a ballistic missile fired at Turkey by Iran – marking the first direct involvement of the alliance in the conflict.
- Strait of Hormuz Closes: The Strait of Hormuz has been officially closed – effectively knocking out 20% of the world’s oil supply and sending Brent crude prices soaring towards $83. This is no good news for investors.
COMEX in Crisis: The March Delivery Squeeze is Getting Intense
We’ve got a real battle brewing in the vaults of the COMEX.
- Delivery Crunch: The March delivery cycle is in a world of trouble. Open interest for the contract is still as high as 429 million ounces while silver inventory is running perilously low, at only 85-86 million ounces.
- The Squeeze is Coming: Analysts are warning that if just 25% of the people holding these contracts decide to go for the physical, the COMEX would need 100 million ounces – a number that’s simply impossible to meet.
- Cash-For-Delivery Deal: There’s talk that the exchange is offering cash incentives to try and get traders to settle their contracts in dollars rather than taking delivery of the metal. This is not a good sign – it usually signals the market is on the verge of a total meltdown.
Technical Analysis: The $83.90 Line in the Sand
Silver has bounced back on the 2-hour chart after its big liquidation on March 3.
- Support Level Holds Strong: Buyers jumped in to defend the $79.26 level, a 0.236 Fibonacci retracement – and it’s just flipped the market bias back the other way.
- Resistance Ahead: The 50-day EMA is now $85.76, and the 100-day EMA is $85.98 – and there’s a good chance we’ll see silver get stuck against these resistance levels until it gets above $86.80.
- Momentum is Building: The RSI has rebounded from oversold territory to 45, and this is starting to look like a market that’s ready to break out in a big way.
2026 Forecast: An Average of $81 to $135 Targets
Despite all the daily noise, the fundamental floor for silver is now getting a whole lot higher.
- The Sixth Deficit: We’re looking at a 67 million-ounce deficit for this year, the sixth one in a row where supply has failed to meet demand.
- Institutional Targets:P. Morgan are sticking with an average 2026 target of $81, but we’re seeing much more aggressive forecasts popping up – with the gold/silver ratio and the potential for targets of $135 or even $309.
- Industrial Demand: We’re seeing a decent boost to demand from the AI and data center sector – but this is getting partially offset by the decline in the solar sector, keeping fabrication demand at around 650 million ounces.
The Verdict: A High-Octane Breakout Setup
As a professional analyst, I’m keeping a very close eye on the Strait of Hormuz and the COMEX inventory data. The combination of a full-blown naval war and a physical delivery squeeze is a seriously volatile setup for silver.
Trade Idea: We’re looking for long positions above $86.80 with targets at $92.20. Conversely, a sustained break below $82.30 would see us go short with targets at $78.05, and a stop-loss above $85.90.
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