Silver Reverses Below $80 as Dollar Strength and Tensions Return

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Silver is pulling back after a sharp rally, as a stronger US dollar and renewed geopolitical tensions weigh on prices.

Silver Rally Followed by Sharp Reversal

Silver experienced a strong recovery after falling to around $61 in late March, regaining momentum and surging above $83 on Friday. The move marked a sharp 6% daily gain, driven largely by a weaker US dollar and shifting expectations around US monetary policy.

However, the bullish momentum proved short-lived. At the start of Monday’s Asian session, silver reversed lower, dropping back below $80 as the US dollar strengthened by nearly 1%. This sudden shift highlights the fragile nature of the recent rally.

Geopolitical Shifts Drive Volatility

Last week’s rally was supported by signs of easing tensions in the Middle East. Iran had announced that the Strait of Hormuz was open to commercial shipping during the ceasefire period, reducing immediate geopolitical risks and supporting broader market sentiment.

Over the weekend, however, tensions escalated again. Renewed conflict, including continued strikes in Lebanon and disputes between Iran and the United States, reversed earlier optimism. Iran has since tightened control over the Strait of Hormuz, reintroducing uncertainty into global markets and increasing shipping risks.

Safe-Haven Dynamics Shift

Interestingly, both silver and Gold have not responded in the traditional safe-haven manner during this period. Instead of rallying on rising geopolitical risk, prices have come under pressure.

This shift suggests that macro factors—particularly US dollar strength and interest rate expectations—are currently outweighing safe-haven demand. As a result, precious metals are behaving more like risk-sensitive assets in the current environment.

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 $61 support zone and the 100 SMA (red) on the daily chart helped as well. We saw a rebound above $80 by Thursday last week.

Silver Chart Daily – Returning to the 100 SMA

But the 50 daily SMA (yellow) acted as resistance at the top after the rebound and sellers returned. However , the trend still remains upward, but buyers will have to push the price above the 100 SMA at around $70 which is a key resistance now, with higher levels sitting 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 $60, $60 and then $53.

Industrial Demand Adds Another Layer of Risk

Unlike gold, silver has a significant industrial component, making it more sensitive to economic growth expectations. Demand from sectors such as electronics, electric vehicles, and solar energy plays a major role in shaping its long-term outlook.

This dual nature creates additional uncertainty. While safe-haven demand can support prices during periods of instability, any signs of slowing global growth can weigh heavily on industrial demand.

Upcoming economic indicators, particularly business activity surveys, will be closely monitored for signals about the strength of the global economy. Weak data could renew downward pressure, while stronger readings may help stabilize sentiment.

Outlook: Volatility Likely to Continue

Looking ahead, silver is likely to remain highly volatile as markets react to both geopolitical headlines and macroeconomic developments. The renewed tensions have already reversed last week’s gains across multiple asset classes.

While President Trump has indicated that a deal with Iran remains possible, uncertainty persists. Until clearer direction emerges, silver is expected to trade with heightened sensitivity to both currency movements and geopolitical risk.

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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