Silver briefly slipped below the key $55 level on Friday but quickly regained its footing as the new week began, despite Brent crude gapping above $90 following another escalation in the US-Iran conflict. The lack of additional selling is notable. Throughout last week, higher oil prices fueled expectations of renewed inflation pressure, lifting Treasury yields and the Dollar while weighing on precious metals. Yet even after another round of geopolitical deterioration over the weekend, silver failed to attract fresh downside momentum, suggesting much of the bearish repricing had already taken place.
Why didn’t silver extend its decline?
The answer lies in how markets interpreted the latest developments. Brent had already surged more than 17% last week, its biggest weekly gain since April, meaning investors had substantially priced in the risk of a prolonged disruption to Middle East oil supplies. The weekend headlines largely reinforced that narrative rather than introducing a fresh shock. At the same time, Brent itself struggled to build on its initial break above $90 during Asian trading, helping stabilize broader inflation expectations. As oil retreated back below $90, silver recovered further, indicating that bearish conviction is beginning to fade even though macro conditions remain challenging.
Can diplomacy prevent another wave of selling?
There are still reasons for markets to avoid pricing the most disruptive outcome. Iranian Foreign Ministry spokesman Esmail Baghaei said negotiations with the US could continue if they serve Iran’s national interests, adding that intermediaries have continued exchanging messages despite the latest US strikes and military casualties. Those comments keep diplomacy alive and support the view that the Strait of Hormuz blockade could ultimately prove temporary rather than permanent. However, the path remains highly uncertain. If negotiations fail to produce visible progress over the coming days and Brent resumes its advance toward $100, markets would likely rebuild inflation expectations once again, lifting yields and the Dollar while exposing silver to another round of selling pressure.
What does the technical outlook suggest?
Technically, the broader near-term outlook remains bearish as long as resistance at 59.66 caps rebounds. Following the break of 55.59 support, the decline from 121.83 is still expected to extend toward the psychological 50 level, which sits close to 76.4% retracement of 28.28 to 121.83 at 50.35.
Nevertheless, downside momentum is beginning to show signs of exhaustion. Bullish convergence on the 4H MACD suggests sellers are losing control despite the latest geopolitical headlines. A firm break above 59.66 would confirm short-term bottoming and open the way for a stronger recovery toward 63.25, with scope to extend further to the 55 D EMA, now at 65.76. Such a move would likely coincide with a clearer path toward de-escalation in the Middle East and renewed easing in oil prices.
