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The picture is clear: Precious metals have been the biggest losers on the stock market since military action against Iran began on Saturday, February 28, with gold and silver prices falling. Yesterday, I covered the main fundamental reasons for this decline in an article on gold on TradingView, which you can read in my analysis log on TradingView.
The rebound of the US dollar in the foreign exchange market and the rebound of market interest rates are two fundamental factors that invalidate the historical hedging effect of precious metals in the face of geopolitical risks.
The chart below shows the performance of financial assets since February 28, with gold and silver being the major assets with the largest declines.
However, a silver price correction (XAG/USD) represents an opportunity both fundamentally and artificially, as the supply/demand ratio favors long-term silver price appreciation. Technically, any return to the key support level of $50 can be viewed as a buying opportunity.
Beyond this cyclical backdrop, the structural outlook for the silver market remains very strong. Industrial demand continues to grow steadily, driven by high-growth industries such as artificial intelligence, solar energy and electric vehicles. Silver is a key metal in the manufacture of solar panels and many electronic components, making it a strategic asset in the global energy transition.
At the same time, the show struggled to keep up. The global silver market has been in a structural deficit for years, with demand continuing to exceed supply. Part of the reason for this is that silver is primarily produced as a by-product of the extraction of other metals such as copper, lead or zinc, which limits the ability to quickly adjust production when demand rises.
Technically, the $50 area represents a key long-term level that could attract heavy buying. A return to this level could provide investors with a mid- to long-term strategic entry point, potentially returning prices to historic highs, and potentially even higher if the supply-demand imbalance persists.
In summary, despite short-term downward pressure from macroeconomic factors, silver remains in a long-term upward trend. Patience and discipline remain the keys to making the most of the opportunities presented by the corrective phase.
The chart below shows the monthly Japanese candlesticks for XAG/USD:
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