Silver rose for a second session on Monday, but the rebound looked fragile as Brent crude climbed above $90 a barrel and the US-Iran conflict moved closer to a broader regional war.
Spot silver traded near $56.85 an ounce in early dealing, up about 1.8%, after moving between $55.40 and $57.49.
The gain reflected some defensive demand, yet the metal remained exposed to the inflationary consequences of restricted energy flows through the Strait of Hormuz.
Higher oil prices could keep the Federal Reserve focused on persistent price pressures and lift the opportunity cost of holding non-yielding assets.
Industrial demand clouds silver’s haven appeal
Silver’s large industrial footprint makes its reaction to geopolitical stress less straightforward than gold’s.
The metal is widely used in solar panels, electronics, electric vehicles and data-centre equipment, tying its outlook closely to manufacturing activity and business investment.
A prolonged rise in energy and transport costs could squeeze industrial margins and weaken demand from manufacturers.
Concerns about slower global growth may therefore offset some of the buying normally associated with periods of political uncertainty.
That dual role helps explain why silver can initially rise alongside other havens before losing momentum.
Investors must weigh immediate demand for protection against the risk that deteriorating economic conditions eventually reduce physical consumption.
Profit-taking keeps the rebound fragile
Silver’s sharp intraday swings also suggest traders remain reluctant to build large positions.
The metal has recovered from recent lows, but repeated selling near $57 shows that investors are using rallies to reduce exposure rather than chasing prices higher.
The recent correction has also highlighted silver’s tendency to move more aggressively than gold during periods of market stress.
Its smaller and less liquid market can amplify both gains and losses, particularly when speculative positioning becomes crowded.
A convincing advance would require stronger follow-through above recent resistance and signs that buyers are prepared to hold positions through heightened volatility.
Until then, the rebound may remain vulnerable to another round of profit-taking.
$57.50 barrier defines the technical setup
Monday’s advance brought silver towards $57.50, the top of its early-session range and the first resistance area for buyers.
A sustained break above that level would improve near-term momentum and bring $58 into view.
Failure to clear $57.50 could invite fresh selling, with $55.40 providing immediate support.
A move below that level would expose the psychological $55 mark and suggest the rebound is losing force.
Silver’s direction now depends on which side of the geopolitical shock dominates: haven buying or an oil-driven rise in inflation and interest-rate expectations.
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