... Trade Reviews Silver gains on safe-haven demand as IMF warns of growth risks

Silver gains on safe-haven demand as IMF warns of growth risks

Silver prices recorded significant gains as the International Monetary Fund (IMF) cautioned that global growth could slow to a range of 2.0%–2.5% due to escalating tensions in the Middle East. Beyond the geopolitical risks that traditionally stimulate safe-haven demand, reports of potential US-Iran diplomatic discussions in Pakistan and a weakening US dollar have further bolstered the metal's investment appeal.

By Daniel Mejía

The IMF warns that global economic expansion could retreat to 2.0%–2.5%, raising the risk of recessionary impacts in vulnerable countries should disruptions in the Strait of Hormuz persist.
Silver surged 5.20% to $79.50 per ounce following indications of a second phase of US-Iran talks in Pakistan, supported by a broader depreciation in the US Dollar Index (DXY).
Neutral momentum indicators suggest a temporary period of consolidation, indicating a temporary absence of predominant market direction.

IMF downgrades global growth projections amid Strait of Hormuz tensions

According to the latest outlook from the International Monetary Fund (IMF), the global growth forecast is under pressure due to the potential for economic disruptions stemming from a closure of the Strait of Hormuz. While the IMF noted that the actual impact would depend on the duration and intensity of the conflict involving the US, Israel, and Iran, the organisation provided a growth range of 2.0% to 2.5% for 2026—from 3.4% in 2025. Such a range suggests that several vulnerable economies could face the risk of falling into a technical recession.

Hopes of diplomatic resolution via US-Iran talks support silver prices

Reports from Reuters indicate that US President Donald Trump has suggested that negotiations aimed at resolving the multi-faceted conflict between the US, Israel, and Iran could resume in Pakistan in the coming days. This development follows the recent collapse of a previous round of discussions held on Pakistani territory last weekend.

In response to these remarks, silver prices experienced a sharp appreciation, increasing by 5.20% to settle at $79.50 per ounce by the market close. This upward movement was facilitated by a 0.27% decline in the US Dollar Index (DXY). Market participants speculate that a diplomatic resolution in the Middle East could deter the Federal Reserve from adopting a more restrictive monetary policy stance. Silver typically trades higher as the dollar weakens, as the metal becomes more cost-effective for international investors holding other currencies.

Technical analysis of the Silver Futures Contract

From a technical perspective, silver maintains a robust long-term bullish structure; however, a recent period of consolidation has temporarily stalled the upward momentum. Key observations include:

Trend Context: The long-term trajectory for silver remains decisively bullish. Nevertheless, the price has surrendered critical levels in the short term and is currently oscillating between the 50-day and 100-day Simple Moving Averages (SMAs).
Resistance Levels: Should the psychological barrier of $80.00 per ounce be breached, the primary upside technical level remains the short-term resistance at $92.50. A decisive close above this level would signal potential for further extension into higher price territory.
Support Levels: In the event of a technical retracement, primary short-term support is identified at $70.00—a significant psychological threshold. Should this level fail to hold, the next structural floor is located at $66.00. A breach of the $66.00 zone would heighten the risk of a more pronounced reversion.
Momentum and Volume: Both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) are currently trading near neutral levels, indicating a temporary absence of a short-term predominant market direction.