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Silver prices (XAG/USD) showed a partial recovery on Monday but remained under pressure amid geopolitical tensions between the US and Iran, which caused a weekend gap down. The metal tested the 100-day simple moving average (SMA) at $75.58, a key technical level, before consolidating near $75.58 after touching a daily low of $72.61. Traders are closely watching whether the 100-day SMA can hold as support, with a breakdown potentially opening the door for further declines toward $72.61 or lower. The 100-day SMA is a widely used indicator for trend direction, and its failure to provide a solid base for buyers signals weakening bullish momentum.
For markets, the 100-day SMA's role as a psychological and technical threshold makes it critical for assessing silver's near-term trajectory. A sustained move below this level could trigger broader risk-off sentiment in commodities, especially if geopolitical tensions escalate or the US dollar gains strength. Traders should also monitor the $75 psychological level, which has historically acted as a key resistance-turned-support in silver's price action. The asset's performance here will influence positioning in related commodities like gold and industrial metals.
The outcome of this technical test will have implications for global investors, particularly in the Gulf where commodities are a significant part of investment portfolios. If sellers dominate, silver could face renewed bearish pressure, potentially impacting hedging strategies and portfolio allocations. Investors should watch for follow-through selling below $72.61 or a rebound above $75 to gauge the next phase of the trend. Central bank policies and geopolitical developments will remain key drivers in the coming weeks.
