Silver Surges to $86.50 on Dollar Slump After Supreme Court Blocks Trump Tariffs

Traders' Opinions

Summary:

Silver prices surged past $86.50 on Monday, driven by a potent mix of domestic political upheaval and international conflict fears.

BUY XAGUSD

Close Time

CLOSED

86.600

Entry Price

94.000

82.900

87.157 -1.018 -1.15%

63.2

Pips

Profit

82.900

87.232

Exit Price

86.600

Entry Price

94.000

The silver market is flashing bright white-hot on Monday, as a seismic legal blow to the White House’s trade authority sends shockwaves through the currency markets and reignites a frenzy for safe-haven assets.

Spot silver (XAG/USD) rallied sharply during the European session, climbing 2.13% to trade near the critical $86.50 per ounce threshold. The move higher isn't just a technical bounce; it is a direct response to a constitutional crisis brewing in Washington that has effectively thrown the future of US trade policy into legal limbo.

At the heart of this rally is a stunning rebuke from the US Supreme Court. In a ruling late Friday that caught many political analysts off guard, the nation’s highest court accused former President Donald Trump of grossly overstepping his executive authority. The Court blocked the implementation of so-called "reciprocal" tariffs, ruling that the use of the International Emergency Economic Powers Act (IEEPA) to justify the trade agenda was, in the Court's words, "illegal."

This verdict effectively guts the legal foundation of Trump’s aggressive trade posture, creating a vacuum of uncertainty. For markets, uncertainty is the only catalyst needed to reshuffle the deck. The immediate casualty has been the US Dollar. Investors, spooked by the prospect of a paralyzed trade policy and potential constitutional gridlock, are fleeing the greenback. The US Dollar Index (DXY), a key measure of the currency against a basket of six major peers, slumped another 0.35% to hover near a worrying 97.45 handle.

For silver, the math is simple: a weaker dollar lowers the purchase price for international buyers, making the white metal a significantly more attractive bet. But the calculus extends beyond mere currency fluctuation. When the legal bedrock of the world's largest economy appears to crack, the theoretical appeal of precious metals as a store of value becomes a practical necessity. We are seeing precisely that safety trade flow into the silver market today.

However, to focus solely on Washington would be to ignore the ominous clouds gathering over the Persian Gulf, which are providing an additional, and perhaps more volatile, tailwind for prices.

Geopolitical risk is once again taking center stage. According to a detailed report from The Wall Street Journal last week, the Trump circle is reportedly weighing options that include a limited military strike on Iran. The purported goal? To force Tehran back to the negotiating table over its nuclear program. While such actions have been discussed hypothetically for years, the specificity of the WSJ report suggests the unthinkable is moving closer to the realm of the possible.

Any kinetic military action in the Strait of Hormuz, a critical artery for global energy supplies, would send shockwaves through every asset class. Silver, often overshadowed by gold in times of geopolitical strife, stands to benefit immensely as investors seek tangible assets immune from political whims. The combination of domestic legal chaos and international sabre-rattling has created a perfect storm for the precious metals complex.

Technical Analysis

From a technical perspective, silver remains in a recovery phase within a broader corrective structure, following the sharp selloff seen earlier in February. On the 4-hour chart, price action has rebounded strongly from the $72.00–$73.00 demand zone, an area that previously acted as a major base and has once again attracted aggressive dip-buying interest. This rebound has unfolded in a rising corrective channel, indicating improving short-term momentum, though the broader structure has not yet fully transitioned back into a clean bullish trend.

Silver is currently consolidating just below the $86.50–$88.00 supply zone, which has repeatedly capped upside attempts. This zone also aligns with prior breakdown levels, reinforcing its role as a key technical hurdle. The recent pause near this area suggests hesitation among buyers rather than outright rejection, implying that the market may be building energy for its next directional move. A sustained 4-hour close above this resistance band would mark a meaningful bullish confirmation and shift focus toward the $92.00–$94.00 region, where the next major supply zone is located.

On the downside, initial support is now established near $84.00, followed by the more critical $80.00–$82.00 zone. This area coincides with the lower boundary of the recent corrective structure and former consolidation highs. A decisive break below $80.00 would undermine the recovery narrative and likely expose silver to a deeper retracement toward the $72.00 lows, signaling that the broader bearish correction remains dominant rather than complete.

Trend dynamics suggest stabilization rather than exhaustion. The reclaiming of prior minor resistance levels and the sequence of higher lows point to improving structure, though silver remains below key overhead supply. Momentum indicators support this view. The Relative Strength Index (RSI) has rebounded from oversold territory and is now holding in the neutral-to-positive zone, indicating strengthening momentum without signaling overbought conditions. Meanwhile, the MACD has turned higher and is approaching the zero line, reflecting a bullish momentum shift but also highlighting that confirmation is still developing rather than fully established.

Overall, silver appears to be at a technical inflection point. Holding above the $84.00–$80.00 support zone keeps the recovery scenario intact, while a confirmed breakout above $88.00 would significantly improve the medium-term bullish outlook and open the door for a broader upside extension.

TRADE RECOMMENDATION

BUY SILVER

ENTRY PRICE: 86.60

STOP LOSS: 82.90

TAKE PROFIT: 94.00

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Silver Surges to $86.50 on Dollar Slump After Supreme Court Blocks Trump Tariffs

Technical Analysis

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