Silver faced a sharp sell-off on Thursday, plummeting approximately 5% to around $67.71 per ounce. This decline pushed the metal decisively below the psychologically significant $70 threshold, a move driven by a potent combination of renewed inflation fears and shifting interest rate expectations.
A Dual Threat: Oil and Interest Rates
The immediate catalyst stems from escalating Middle Eastern tensions. Iran’s rejection of a U.S. ceasefire proposal and its demand for full control over the Strait of Hormuz have heightened fears of a prolonged blockade of this critical trade route. Consequently, oil prices surged past $100 per barrel, reigniting concerns over persistent inflationary pressures.
This oil shock has directly influenced monetary policy outlooks. The Federal Reserve Bank of Cleveland now forecasts a U.S. Consumer Price Index reading above 3% for March. Market pricing has undergone a dramatic shift: for 2026, traders no longer anticipate interest rate cuts. Instead, the probability of a rate hike is now seen as greater than that of a policy easing. This creates a fundamentally hostile environment for non-yielding assets like silver.
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Compounding the pressure is a strengthening U.S. dollar. In times of uncertainty, investors are flocking to the greenback as a safe haven rather than precious metals. This dynamic makes dollar-denominated silver more expensive for international buyers, further suppressing demand.
Technical Picture Points to Further Weakness
Market technicians observe a “fade the rally” pattern, where any brief price recoveries are consistently met with fresh selling. Key support levels now include the low from March 19 and the February trough. Should the 200-day Exponential Moving Average fail to hold, the downward momentum could accelerate significantly. On the upside, the $75 level, coupled with the 50-day EMA, presents a formidable barrier. This resistance is likely to remain intact as long as the twin forces of a robust dollar and restrictive Federal Reserve expectations persist.
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