Silver and Gold Safe Haven No More? XAG $65 Support Holds, Offering Hope for Buyers

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Silver tumbled sharply last week, as macroeconomic pressures overshadowed its traditional safe-haven appeal despite escalating geopolitical tensions.

Historic Selloff Hits Silver

Silver prices plunged more than 15% last week, marking one of the sharpest declines in recent history. The metal dropped to around $65.50 per ounce, where a key support level has, for now, managed to hold.

The scale of the move highlights a major shift in market behavior, with investors rapidly unwinding positions after a strong prior rally.

Geopolitics Fail to Support Prices

Despite heightened tensions in the Middle East, silver has not benefited from its traditional safe-haven status. Since late February, when conflict escalated involving U.S.-Israeli actions against Iran, the metal has moved lower instead of higher.

This reversal suggests that geopolitical risks are no longer the dominant driver. Instead, broader macroeconomic forces are shaping price action, reducing the appeal of precious metals in the current environment.

Dollar Strength and Fed Policy Weigh

A stronger U.S. dollar has been a key factor behind silver’s decline. Rising oil prices have increased global demand for dollars, as energy transactions are priced in USD, pushing the currency higher.

At the same time, Jerome Powell signaled a more hawkish stance from the Federal Reserve, warning that inflation could remain elevated. Market expectations for a May rate cut have dropped sharply, from around 60% to just 16%.

Higher interest rates reduce the attractiveness of non-yielding assets like silver, accelerating selling pressure.

Technical Structure Signals Caution

From a technical perspective, silver’s broader uptrend has not been invalidated. The break below $70 on Thursday was significant, but the decline was ultimately contained by key moving averages. Support emerged at the stronger buying interest above the $65 support zone and the 100 SMA (red) on the daily chart helped as well.

That support has been holding after second attempt which suggest a base before the trend reversal. Buyers already stepped and silver rebounded sharply, climbing back above $70.

Silver Chart Daily – The 100 SMA Held As Support

But, sellers returned on Friday and on Monday morning the Silver price opened lightly lower after the weekend comments from Trump and Iran. However , the trend still remains upward, with the 100 SMA acting as support. Key resistance levels now sit near $80,  $100 and that is followed by the prior highs around $117–$121. On the downside, initial support is defined by the recent lows near $65 and then $60.

Industrial Demand Adds Complexity

Unlike gold, silver has a significant industrial component, with demand tied to sectors such as electronics, electric vehicles, and solar energy. This makes it more sensitive to economic growth expectations.

Upcoming economic data, particularly flash PMI surveys, will be closely watched for signs of slowing business activity. Any indication of weakening demand could further pressure silver prices.

Conclusion: Silver is facing a challenging environment where macroeconomic forces outweigh geopolitical support. With rising yields, a stronger dollar, and uncertain industrial demand, the metal remains vulnerable in the short term, even as key support levels continue to hold for now.

ABOUT THE AUTHOR See More

Skerdian Meta

Lead Analyst

Skerdian Meta Lead Analyst. Skerdian is a professional Forex trader and a market analyst. He has been actively engaged in market analysis for the past 11 years. Before becoming our head analyst, Skerdian served as a trader and market analyst in Saxo Bank's local branch, Aksioner. Skerdian specialized in experimenting with developing models and hands-on trading. Skerdian has a masters degree in finance and investment.

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