Silver (XAG/USD) traded sideways for a second day, holding near $73.00 in the Asian session on Tuesday. Traders were cautious ahead of US President Donald Trump’s deadline for Iran to reopen the Strait of Hormuz, with ceasefire hopes fading.
The near-term technical bias is mildly bearish as price stays below the 100-period Simple Moving Average (SMA) on the 4-hour chart, with the SMA trending lower. The MACD (12, 26, 9) has improved from negative levels but remains weak.
The Relative Strength Index (RSI) is around 52, pointing to neutral momentum with a slight edge for sellers. A move above the 100-period SMA at $73.22 may meet resistance near the 38.2% Fibonacci retracement at $74.69, with the next level at the 50.0% retracement of $78.89.
On the downside, support is near $72.00, then the 23.6% retracement at $69.50. A break below $69.50 could bring focus to support around $61.11.
The technical analysis was produced with the help of an AI tool.
We are seeing a similar period of hesitation in silver now as we did back in 2025 when markets awaited geopolitical outcomes concerning Iran. Today, the consolidation around the $73.00 level is less about a specific deadline and more about uncertainty surrounding upcoming U.S. inflation data and ongoing shipping disruptions in the Red Sea. The market is holding its breath, mirroring the reluctance to place aggressive bets that we saw previously.
This kind of sideways movement often precedes a significant price break, making options strategies particularly relevant. Current implied volatility on silver options is elevated, with the Cboe Silver ETF Volatility Index (VXSLV) trading at 29.5, about 10% above its three-month average, which signals that traders are pricing in a sharp move in the near future. This makes strategies like a long straddle, buying both a call and a put option, appealing for those who anticipate a breakout but are unsure of the direction.
From a bearish perspective, the technical setup we observed in 2025 with the price holding below key moving averages remains a concern for some. With the most recent U.S. Producer Price Index (PPI) figures coming in slightly cooler than expected at a 2.1% annual rate, the argument for silver as an aggressive inflation hedge has weakened slightly. We’ve seen this sentiment reflected in the derivatives market, where open interest for put options expiring next month below the $70 strike price has increased by 18% over the past two weeks.
Conversely, the fading downside momentum noted in 2025 has a strong fundamental basis today. Industrial demand remains incredibly robust, particularly from the solar and electric vehicle sectors, which now account for over 30% of total annual silver consumption, up from just 22% two years ago. This provides a solid floor under the price, encouraging traders to consider bullish call spreads to target a move toward that old resistance level near $74.69 if positive economic news emerges.
