An evaluation of across various timeframes during the escalation of the U.S.-Iran conflict indicates that both metals are losing their shine, despite prominent research houses advocating renewed upside targets for bulls, fueling confusion among investors amid the escalating war in the Middle East.
I anticipate that the rationale behind revising upside targets by some research houses to above $6,000 from $5,600 appears highly exaggerated, especially while a large part of the region—from Israel across the Middle East—remains under tension, and the U.S. has issued alerts advising its citizens living in Middle Eastern countries to leave immediately by any available means due to the cancellation of a large number of flights across the region.
I have already discussed the reasons behind the steep decline in war premiums in gold and silver prices since the beginning of this conflict, as investors increasingly recognize the importance of holding cash rather than buying precious metals during an active war, particularly as the world faces a sharp surge in global inflation driven by energy supply disruptions.
Undoubtedly, at the onset of this war, U.S. President Donald Trump was continuously threatening Iran despite ongoing diplomatic efforts, seeking to impose what was described as an unreasonable deal, reportedly designed by Israeli Prime Minister Netanyahu, who remained adamant about enforcing the toughest sanctions on Iran.
Now, sentiment has deteriorated. Despite gold and silver futures maintaining an overall uptrend after testing their lows on Feb. 2, 2025, following a steep decline, both contracts attempted to resume their upward trajectory with volatile moves until Monday, when gold futures tested a peak at $5,433.80 and silver futures reached a high of $97.332. This was followed by panic-driven selling that continued into Tuesday after a U.S. embassy in Saudi Arabia’s capital, Riyadh, was reportedly hit by Iranian drones, along with Amazon data centers in the UAE and Bahrain, as Iran retaliated with strikes across several Middle Eastern countries.
Technical Levels to Watch
Gold
On the daily chart, gold futures have broken below the significant support at the 20 EMA ($5,078) and are attempting to hold immediate support at $5,031.49. A breakdown below this level could push futures to test the next major support at the 50 EMA ($4,845.82) by tomorrow.
A sustained move below the 50 EMA could drive futures toward the next support at the 100 EMA ($4,512.59) later this week.
Silver
On the daily chart, silver futures are attempting to defend the significant support at the 50 EMA ($78.976). A breakdown below this level could push futures to test the next major support at the 100 EMA ($68.712) this week.
Spot Gold-Silver Ratio 
On the daily chart, the spot gold-silver ratio (), which has an inverse correlation with gold and silver futures, stands at 62.66, just below the immediate resistance at 66.33. It appears poised for a potential breakout above this resistance in the near term, supported by a bullish engulfing pattern at current levels.
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Disclaimer: Readers are advised to take any position in gold and silver at their own risk, as this analysis is based only on observations.
