Silver Price Forecast: XAG/USD Falls Below $36.50 as Dollar Strengthens, Middle East Tensions Escalate

Silver Price Forecast: XAG/USD Slips Below $36.50 Amid Middle East Tensions and Dollar Strength

The Silver price (XAG/USD) weakens to around $36.20 in Monday's Asian session, as renewed strength in the US Dollar (USD) puts pressure on precious metals. However, intensifying geopolitical tensions in the Middle East may help limit the downside for Silver, traditionally viewed as a safe-haven asset.

US Dollar Recovery Pressures Silver

Silver retreats as the Greenback recovers following upbeat US economic data released Friday. The University of Michigan Consumer Sentiment Index improved to 60.5 in June, rising from 52.2 and exceeding forecasts of 53.5 — its first improvement in six months. This stronger sentiment reinforces near-term USD strength and weighs on commodity prices like Silver.

Middle East Geopolitical Tensions Offer Safe-Haven Support

Despite downward pressure from the USD, geopolitical risks continue to support safe-haven demand. The escalating Israel-Iran conflict — with Israel targeting Iranian nuclear facilities and military installations, and Iran vowing strong retaliation — raises investor demand for stable stores of value such as Silver.

On Sunday, Iran’s Mehr News Agency reported that the fourth phase of Iran's military response against Israel has begun. Iranian officials reiterated they would "respond firmly to any adventurism" by Israel, adding fuel to global market uncertainty.

Internal Linking Suggestions (Tredu.com)

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• US Dollar Strength Tracker – Latest Economic Indicators
• Commodities Daily Recap: Oil, Silver, and Gold Trends