Silver is currently trading near the key $80 support level, weighed down by several fundamental factors at once. Rising global inflation is the first to mention. Elevated consumer prices could trigger monetary tightening worldwide, pushing major central banks toward a more hawkish stance. This, in turn, is likely to reduce demand for non-yielding precious metals in favor of alternatives offering fixed income.
Another headwind is the escalating Middle East crisis. Over the weekend, the world witnessed the collapse of the US-Iran ceasefire, followed by a renewed blockade of the Strait of Hormuz. These developments boosted energy costs and strengthened the greenback in early trading on Monday. Silver, in contrast, felt additional pressure, as it currently shows an inverse correlation with both oil prices and the Dollar Index (DXY).
From a technical perspective, bullion is now moving within an ascending channel. However, fundamental headwinds could lead to a break through its lower boundary, paving the way to a decline toward the next target at $72.5.
The ultimate recommendation is to sell silver if it breaches the upward-sloping trend line, aiming for $72.5 within a week. To mitigate the risk of adverse market movements, place a Stop Loss order 1% above the entry point.
This content is for informational purposes only and is not intended to be investing advice.
