Reports emerged that silver vaulted nearly 4% to around $78 per ounce as optimism over a potential 60-day U.S.-Iran ceasefire agreement swept through global markets, raising a critical question: is this move built on durable demand or just a fleeting geopolitical trade? Silver Jumps to $78 on U.S.-Iran Ceasefire Momentum, but Can a Deal That Keeps Falling Apart Sustain the Rally?
Silver surged nearly $2 per ounce on Monday as traders bet that the U.S.-Iran conflict — the single biggest drag on the metal since March — may finally be winding down. Silver rose to $77.66 per ounce on May 25, up 3.07% from the previous day. The move matters because silver remains roughly 17% lower since the Middle East conflict began , meaning even a sharp bounce only starts to claw back a deep war-driven hole.
A "Largely Negotiated" Deal Still Has Massive Gaps. Trump said an agreement had been "largely negotiated" and that the Strait of Hormuz — the chokepoint for roughly a fifth of global oil — would reopen under the memorandum. But the details are fragile: key sticking points include Iran's nuclear program, frozen assets, and major disagreements over the timing of sanctions relief and control of the waterway.
The deal includes a memorandum of understanding as a first phase, with broader talks within 30 to 60 days — and clear sticking points remain. That means the $78 price tag is built on hope, not a signed document.
Silver Is Trading Like an Industrial Metal, Not a Safe Haven. The gold-to-silver ratio compressed from roughly 62:1 to 55:1 in a single week — a move driven entirely by silver — confirming it is trading as an industrial metal, not a safe haven. That's important: if peace falters and risk appetites reverse, silver could give back gains faster than gold. Markets are already pricing in roughly a 55% probability of at least one Fed rate hike by October , which would punish non-yielding assets like silver.
A Sixth Year of Supply Shortages Keeps a Floor Under Prices. Even if this rally fades, the global silver market is entering its sixth consecutive year of supply deficit, with a projected 46.3 million ounce shortfall in 2026.
COMEX registered inventories have fallen to roughly 315 million ounces from 531 million in October 2025. That structural squeeze means any sustained peace-driven demand boost — from reopened shipping lanes and lower energy costs feeding industrial output — would land in a market with very thin cushions.
The Bottom Line for Holders. J.P. Morgan's full-year average forecast sits at approximately $81 per ounce, the Reuters 30-analyst median at $79.50, and ING at $78 — suggesting Monday's price is roughly in line with Wall Street's base case. Upside depends entirely on whether a 60-day framework turns into a lasting peace. History in this conflict says: don't count on it.