Silver (XAGUSD) prices continue to tumble this month as a geopolitical paradox hammers non-yielding assets. The selloff has pushed silver’s 14-day relative strength index (RSI) down to the mid-30s, indicating the bearish momentum may finally be near exhaustion.
Note that silver has now “reversed” its entire 2026 gains. Still, there’s reason to believe that it will sharply recover as the year unfolds.
Why Silver Prices Dipped Sharply in March
Typically, silver thrives as a safe haven, but recent escalations between Iran and the U.S. are proving a complex headwind instead.
As Iran effectively closed the Strait of Hormuz and struck Qatar’s Ras Laffan industrial complex on March 19, Brent crude (CBK26) prices soared to a high of about $119, reigniting inflation fears.
This prompted markets to bet on a more aggressive Federal Reserve, which resulted in an increase in Treasury yields and a “flight to safety” in the dollar.
Together, these developments have temporarily overshadowed silver’s safe-haven status, forcing a liquidation of long positions even as geopolitical risks remain at a decade high.
Why Silver Is Worth Buying in 2026
The current pullback in silver nonetheless offers a compelling buying opportunity to investors eyeing its indispensable role in the global green energy transition.
Industrial demand for the white metal is projected to hit an all-time high, driven by a global solar PV capacity expected to reach 665 GW.
Plus, the electric vehicle (EV) sector now requires roughly 50 grams of silver per unit for complex circuitry and battery management.
With the market facing its sixth-consecutive year of structural supply deficits — estimated at 67 million ounces — the fundamental supply-demand mismatch suggests the recent price action is likely a temporary detour.
Bank of America Sees Massive Upside in Silver
Major investment firms like the Bank of America Securities remain bullish on silver as well.
According to its analysts, the current gold-silver ratio sits at a rather stretched 80:1 currently, and a reversion to the 2011 low of 32:1 could propel silver to $135 within the next 12 months.
In fact, in the moonshot scenario, the white metal could even surpass $300 if the gold-silver ratio returns to the 1980s extreme of 14:1.
Moreover, historical precedent suggests that prolonged geopolitical conflict eventually triggers a pivot toward hard assets, meaning any further escalation in the Middle East could spark a massive catch-up trade as silver recaptures its safe-haven premium.
This article was created with the support of automated content tools from our partners at Sigma.AI. Together, our financial data and AI solutions help us to deliver more informed market headline analysis to readers faster than ever.
On the date of publication, Wajeeh Khan did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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