Gold & Silver Outlook: Dollar Strength Caps Haven Rally Amid Hormuz Risks

Key Events

• Gold and silver dropped on profit taking and dollar strength, briefly below 5300 and 85 respectively, before reversing back above those zones on persistent haven demand.
• Strait of Hormuz closure risks raise inflationary pressures and prolong rate-hold expectations, strengthening the dollar and temporarily stabilizing the precious metals surge, alongside tighter margin requirements.

Amid the storm of regime headlines and regional battles, drawdowns in haven assets may fuel narratives of potential de-escalation. However, several dynamics within this escalation may be contributing to the short-term pullback.

I wrote about the Strait of Hormuz in yesterday’s article, WTI Forecast: Hormuz Risks, Aramco Impact, and OPEC Supply highlighting its significance as a narrow passage hosting 20–30% of global crude and energy flows. Its current constrained activity, rising insurance premiums, and ongoing attacks, has already lifted crude prices above 72 and Brent above 80. That, in turn, revives inflation risks, strengthens the dollar, and reinforces rate-hold expectations, capping gains in currencies and precious metals.

Gold had already gained roughly 22% year-to-date before the latest escalation, reaching an all-time high near 5,600 in late January before correcting. We are still trading within that corrective phase, rather than witnessing a structural shift or regime outcome. The Iranian regime has been consolidating power for over 40 years; any outcome is unlikely to unfold smoothly.

Silver’s story is more complex. Its industrial exposure adds another layer: if conflict begins to weigh on global manufacturing and trade, silver’s demand outlook deteriorates even as its haven appeal rises. That dual nature makes it choppier than gold during conflict cycles. Yesterday’s move reflected that volatility, with a steeper drawdown of over 10%, briefly testing 83 before recovering above the 85 zone.

This short dip could simply be a breather, unless a close emerges below key levels, supporting a deeper corrective phase.

If the Strait situation escalates further, or energy inflation feeds into broader CPI prints, gold maintains a clear macro path in line with inflation-hedging flows.

Technical Analysis: Quantifying Uncertainties

Gold Outlook: Daily Time Frame – Log Scale

Source: Trading view

On the daily log scale, gold’s price action reflects indecision, with small-bodied candles near the 5,400 zone following a prior gap higher, raising short-term exhaustion risks.

A weekly close above 5,430 would reopen upside momentum toward 5,600 and potentially the 6,000 threshold.

On the downside, extended profit taking with a close below the 5,280–5,250 zone exposes 5,100 as the next rebound area. A deeper corrective structure would bring 4,970, 4,780, and 4,670 into focus. The steeper scenario revisits the February 2026 low near 4,380 from a medium-term perspective.

Silver Outlook: Daily Time Frame – Log Scale

Source: Trading view

Comparing silver’s corrective cycle to its April 2025–January 2026 rally of over 300%, a critical support zone aligns with the RSI holding near neutral.

A sustained break below the 82–80 support exposes 75, 68, 60, and potentially 48. The 48 level aligns with a 46-year trendline connecting consecutive highs since 1980 prior to the 2025 breakout,  marking a structurally significant dip-buying zone. These levels also align with key Fibonacci retracements of the April–January advance.

On the upside, if a new impulsive wave develops, resistance levels stand near 92, 96, 106, and 120 — before projecting toward new historical thresholds near 130 and 200.

Given the elevated risk of sharp swings across gold and silver, confirmation from higher time-frame structures remains essential in navigating daily volatility and headline-driven moves.

Written by Razan Hilal, CMT

Follow on X: @Rh_waves