Silver suffers from politics

XAG/USD

Key zone: 81.50 -85.50

Buy: 87.50 (on strong positive fundamentals); target 90.00-91.50; StopLoss 86.80

Sell: 81.00 (after retesting 83.50); target 78.50-75.00; StopLoss 81.70

Geopolitical risks in the Middle East and disruptions in sulfuric acid supplies are putting pressure on global silver production and increasing supply-risk premiums. India’s sharp increase in the silver import duty to 15% limits inflows from abroad, heightens market volatility, and complicates access to supplies.

In 2026, silver has become one of the most volatile and, at the same time, strategically important assets in the global commodities market. Following a historic rally and a subsequent deep correction, the market entered a phase of structural deficit, where fundamental drivers collide with aggressive speculative trading.

We remind: in the event of force-majeure liquidation of positions, spot silver falls much faster and more dangerously than gold, therefore risk protection must be strict. In the medium term, fundamentals remain bullish; however, volatility will be extreme.

• The Government of India raised import duties on silver to 15% from 6%, directly limiting overseas supplies and triggering volatility in the Indian precious metals market, while complicating access for a large group of consumers.
• Persistent geopolitical tensions in the Middle East, including ongoing disruptions in the Strait of Hormuz, have intensified concerns over supply-chain reliability and contributed to rising premiums for physical delivery.
• Additional constraints emerged due to global disruptions in the sulfuric acid market, which are restraining silver production through their impact on copper and zinc mining. The energy crisis in Peru raised concerns about the operation of the mining sector. This is the world’s second-largest silver producer, accounting for approximately 14% of global production.
• As a result, the Gold/Silver Ratio fell below 55. This is very low. Therefore, if silver maintains momentum, gold will also most likely gradually catch up with it.

These developments pressured sentiment, although price dynamics remained influenced by broader selling pressure.

A reduction in the level of aggression in relations between the United States and China is stabilizing demand for industrial silver and positively affecting market prices. Silver’s resilience above key moving averages indicates strong underlying demand.

Although the market remains dependent on geopolitics, in the short term silver is currently trading as a regular speculative asset, without investment drivers. In the near term, XAG/USD maintains a bullish technical structure amid strong buying momentum; however, overbought signals are intensifying against the backdrop of a strong upward impulse and key support levels. In the near future, consolidation within the $84.00–$89.00 range is possible.

So we act wisely and avoid unnecessary risks.

Profits to y’all!