Silver Under Pressure as Geopolitics Drive Rates Higher — Key Support in Focus

Silver is feeling the heat as global events push interest rates up, and a key support level is now the main focus.

Silver (XAG/USD) dipped towards the $72.85 mark early on Tuesday. It continues to face downward pressure as tensions rise in the Middle East. News about Iranian attacks on ships in the Strait of Hormuz has sent crude oil prices up, which in turn brings new worries about inflation to the market.

This inflation aspect is quite important. When energy prices climb, it raises the chance that the Federal Reserve will keep interest rates high for a longer period. For an asset like silver, which doesn't pay interest, this creates a significant challenge. Neel Kashkari backed this idea up, mentioning that we might see more rate increases if inflation stays stubbornly high because of higher energy costs.

Looking at the charts, silver (XAGUSDT on a 4-hour timeframe) is still moving in a somewhat erratic way, but the overall picture is gradually leaning towards a downturn. Every time the price tries to go up, it doesn't get as high, and sellers are quick to jump in around the 79–80 mark. This clearly shows that buyers are getting tired.

The price is currently hovering around 72.7, resting just above a crucial support area that runs from 71 down to 70. While this area is holding steady for now, it's definitely feeling the strain. If the price clearly breaks below 70, it would likely drop to the next targets, which are between 68 and 66, and possibly even further down to 61.

Any upward movement seems limited. The price will immediately hit resistance around 76–78, and then there's a stronger area where sellers are waiting between 80 and 83. Unless the price gets back above 80 and stays there, any rally we see will probably be just a short-term bounce, not a real change in the overall trend.

The momentum indicators also point to a downturn. They're staying below the middle line and aren't showing any real signs of buyers pushing the price up.

Overall: as long as the price stays below the 78–80 range, we'll likely continue to see a bearish trend. If it drops below 70, selling could pick up speed, and only a strong move above 80 would signal a return to a bullish outlook.

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