An evaluation of and futures across various timeframes during the escalation of the U.S.-Iran conflict indicates that both metals are losing their war premium this week.
Despite gap-up openings, prices have struggled to surpass key resistance levels on daily charts. This trend may reflect challenges faced by the U.S. administration in justifying continued military engagement after achieving primary objectives such as regime change and the destruction of Iran’s nuclear capabilities.
Sen. Mark Warner, the top Democrat on the Senate Intelligence Committee, said the ultimate objective of the US’s military action in Iran remains unclear to him as the Trump administration’s messaging continues to shift.
Warner told CNN that he has heard “at least four different goals in the last eight or nine days,” listing destroying Iran’s nuclear and ballistic missile capabilities, regime change, and sinking a fleet of Iranian ships as different aims for the mission.
“I’m not sure which of those goals, if met, means that we’re at an end game,” he said moments after leaving a classified briefing with top administration officials, including Secretary of State Marco Rubio and Defence Secretary Pete Hegseth, who insisted Monday that regime change was not the US’ purpose for weekend strikes in Iran, despite President Trump’s initial insinuations.
He also responded to Rubio’s explanation that the “threat” that prompted the US to strike was Iran’s expected retaliation to planned Israeli military action.
“There was no imminent threat to the United States of America by the Iranians. There was a threat to Israel. If a threat to Israel is the equivalent of an imminent threat to the United States, then we would be in uncharted territory,” he warned.
I find that such developing opinions look evident enough to prove the justifications by the President Trump to American public the reason to continue his war agenda further, and this could turn the circumstances to step back to escape growing concerns over the elevated oil prices as Iran has started to target ships passing through the Strait of Hormuz, a crucial waterway in the south of the country, through which about a fifth of the world’s oil and gas is shipped.
Undoubtedly, this could lead to a buildup of international pressure to halt the war and mitigate surging inflationary pressures resulting from elevated oil prices.
I find that such developments could stop U.S. President Donald Trump from pursuing his war agenda further, while he is still insisting on ‘hardest hits’ on Iran, yet to come, leading to Iran’s threat to Gulf shipping.
Technical Levels to Watch:
Gold
In a daily chart, gold futures are indicating a surge in selling pressure at the current levels as yesterday despite a gap-up, gold futures could not find a breakout above the immediate resistance at $5,433.80, followed by a heavy sell-off that pushed the futures to test the immediate support at $5,269.78 where some reversal was seen, and the gold futures found some reversal on Monday.
On Tuesday, after opening at $5,359.46, gold futures tested a high at $5,394.20 and the day’s low at $5,346.86, gold futures are trading at $5,368, indicating an exhaustion of buying on the way after the formation of a ‘bearish dozi’ in the daily chart, where a breakdown below the immediate support at $5,269 could trigger selling.
Silver
In a daily chart, silver futures also show extensive weakness. Yesterday, despite starting with a gap-up (an opening price higher than the previous close), futures faced stiff resistance at $96.667 and saw a heavy sell-off, which pushed the price to the day’s low at the 9 EMA ($87.745).
Today, ongoing bearish pressure may push prices to break below the 9 EMA, and a sustainable move below the 20 EMA ($85.503)—the 20-period Exponential Moving Average—could push the futures down to test the next support at the 50 EMA ($79.395), the 50-period Exponential Moving Average, where some reversal may occur.
Disclaimer: Readers are advised to take any position in gold and silver at their own risk, as this analysis is based only on observations.
