Silver Down 52% From All-Time High as Hormuz Oil Shock Fuels Fed Hike Bets
Silver traded near $58 on Tuesday, roughly 52% below its January all-time high of $121.76, after sliding almost 4% on Monday. Renewed US-Iran escalation around the Strait of Hormuz drove the latest leg down.
Higher oil prices revived inflation concerns and strengthened bets on a September Federal Reserve rate hike. Traders now watch the June CPI report and Fed Chair Kevin Warsh’s congressional testimony for direction.
Hormuz Blockade and Fed Hike Bets Keep Silver Under Pressure
President Donald Trump reinstated a blockade on Iranian vessels transiting the Strait of Hormuz. He also demanded reimbursement from countries that benefit from US protection of the shipping lane.
The move sent Brent crude 11% higher on Monday, toward $79.60 a barrel, while WTI traded near $72.90, according to Kitco data. Visible tanker traffic through the strait has fallen sharply.
The transmission channel hurts precious metals. Costlier oil lifts inflation expectations, which keeps Treasury yields elevated and supports the dollar. The 10-year yield trades near 4.58%, per the same report.
Markets now price a roughly 51% chance of a September rate hike, against 23% odds of no change, Trading Economics data shows. Today’s June CPI print could move those odds again.
Silver has fallen harder than gold because around 58% of its annual demand is industrial. Solar, semiconductor, and EV buyers are sensitive to slowing growth. However, the structural supply deficit, now running six years deep, remains intact.
Weekly Silver Price Chart Points to a $51.50 Support Test
The weekly chart has printed lower highs and lower lows since the January peak. Another lower low is currently in formation, which confirms the bearish market structure.
The nearest meaningful support sits between $51.50 and $54. This zone coincides with long-term support near $50 and the 0.786 Fibonacci retracement of the 2025 rally.
On the upside, the golden pocket at the 0.618 Fib retracement, near $69, is the closest resistance. That area served as support several times before it broke down in June. The metal briefly rebounded in early July when the dollar weakened, but sellers quickly regained control.
Silver Price Prediction Hinges on Channel Resistance and Rising Support
The daily chart shows a descending parallel channel that has guided the decline since late April. The silver price currently tests the upper band of that channel.
A rejection here would expose the channel midline, which coincides with support around $52. A breakdown below that level would open the lower band near $44, roughly 25% below the current price.
In contrast, an ascending support line from the late June lows is still holding. A bounce from it could initiate a recovery toward the $67 region, about 15% above the current price and just below the weekly golden pocket.
The Bollinger Band Width Percentile (BBWP) indicator keeps falling, which signals a cooldown phase and low volatility. Such compression phases often precede decisive moves. In the near term, bulls need a reclaim of $59.36, while bears target a break below $58, according to Kitco’s levels.
Today’s CPI release and Warsh’s testimony could decide which scenario plays out. Silver either defends its rising support and squeezes toward $67, or it loses $52 and extends the correction toward $44.
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