Silver prices (XAG/USD) traded 0.7% lower near $72.50 in late Asian trade on Monday, consolidating in a limited range as investors awaited Iran’s response to U.S. President Donald Trump’s ultimatum regarding the reopening of the Strait of Hormuz [1]. Over the weekend, President Trump threatened to attack Iranian power plants and bridges if Iran did not reopen the Strait by Tuesday, with deadlines cited as both 8 p.m. and 9 p.m. Eastern Time in the sources [1][2]. Trump described the day as 'Power Plant Day, and Bridge Day, all wrapped up in one' and warned Iran it would be 'living in Hell' if it did not comply [2].
Iran’s foreign ministry signaled it would not reopen the Strait and warned of reciprocal attacks on U.S. infrastructure, stating, 'Iran will reciprocate attacks on its infrastructure and target similar infrastructure owned by the US or related' [1]. Iran also demanded compensation for war damages before fully reopening the waterway and continued strikes across the Gulf, including on Kuwait's oil headquarters [2].
Despite the threats, there were reports, cited by Axios and Bloomberg, that the U.S. and Iran were discussing a 45-day ceasefire, which could lead to a de-escalation in the Middle East if approved—a scenario seen as favorable for silver prices [1]. Trump himself stated in a Fox News interview that there was a 'good chance' for a deal to be reached by Monday, but his mixed messaging has left investors preparing for both a swift diplomatic resolution and a significant escalation [2].
Market reactions have been volatile. The S&P 500 gained 3.4% last week, its best performance since November, as investors bought the dip on hopes of a diplomatic breakthrough, while the Cboe Volatility Index (VIX) surged from below 20 to around 24 [2]. Analysts noted that even a diplomatic breakthrough may not bring immediate relief to markets, with stagflation risks looming due to the month-long war and the blockade of the Strait of Hormuz [2].
Technically, silver remains under mild bearish pressure, trading below the 20-day EMA at $75.20, with support at $70.00 and further downside risk toward $66.70 and $61.00 if selling persists. The RSI at 43 indicates weak momentum but not yet oversold conditions [1]. Investors are also awaiting the release of the U.S. Federal Open Market Committee (FOMC) minutes from the March policy meeting later in the week [1].
CONCLUSION
Markets are highly sensitive to developments around Trump’s ultimatum to Iran, with silver prices and broader assets reacting to the binary risk of escalation or diplomatic resolution. While hopes for a ceasefire exist, persistent geopolitical uncertainty and inflation risks continue to drive volatility and cautious positioning among investors.