Silver has pulled back to the key $63 support level as rising oil prices and stronger-than-expected US PMI data pushed real yields higher. The metal's near-term direction now hinges on whether US-Iran tensions ease or re-escalate, with traders watching both the $63 floor and the $71.50 upside target.
Oil swings tied to Iran outlook drive silver
Silver had benefited from a sharp decline in oil prices as traders priced in an earlier end to the Middle East conflict. Lower energy costs eased inflation concerns and reduced expectations for more aggressive tightening, a combination that had supported the metal.
That optimism faded after the UN General Assembly, where Trump reiterated that the US would make a deal with Iran only after the November elections. His remarks cut near-term hopes for a resolution and helped push oil prices back up.
Real yields rise on strong PMI data
Risk sentiment then soured further after US Flash PMIs showed significantly stronger than expected growth, triggering a hawkish repricing that sent real yields higher and weighed on silver.
Going forward, the focus stays on interest rate expectations and developments in the Middle East. A surprise breakthrough in US-Iran negotiations would likely send oil lower, trigger a dovish repricing and support silver. Conversely, if the standoff drags on or re-escalates, crude oil would likely keep climbing, reinforcing expectations for tighter policy and adding further headwinds for the metal.
Key technical levels to watch
On the daily chart, silver has pulled back once again to the key 63.00 support. Buyers are expected to defend that level, with a defined risk below it, positioning for a rally toward 71.50. Sellers, on the other hand, want to see price break lower to open the door to a drop into the 55.00 handle.
On the four-hour chart, a minor resistance zone sits around 65.00: a rebound into that zone could draw sellers back in, targeting a break below the 63.00 support. A break higher instead would raise the odds of a push toward 71.50, with 68.00 as the first stop.
Today's calendar brings the Trump-Xi meeting and US jobless claims data, but the focus stays on US-Iran developments for silver's next move.
Source: InvestingLive
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