Silver and Miners to ??? Amid Israel-Iran Conflict

Key Drivers of the Current Crisis

For many, this might appear to be a surprise, but this escalation didn’t emerge from a vacuum. The current crisis represents the culmination of months of deteriorating relations between Israel and Iran, with several key factors making this confrontation particularly significant:

1. Nuclear Timeline Pressure: U.S. and Israeli intelligence sources indicated that Iran was closer than ever to obtaining nuclear weapons capability, with some estimates suggesting Tehran could produce weapons-grade material within months. This compressed timeline appears to have driven Israel’s decision to act preemptively.

2. Failed Diplomatic Efforts: President Trump had been pursuing nuclear negotiations with Iran since returning to office, reportedly giving Tehran a 60-day ultimatum to reach a deal. Those talks appeared to stall in recent weeks, with Trump expressing diminished confidence in achieving a diplomatic solution.

3. Regional Proxy Network: Iran’s extensive network of regional allies – including Hezbollah in Lebanon, Hamas in Gaza, and various militias in Iraq, Syria, and Yemen – has been increasingly active against Israeli interests. This “Axis of Resistance” threatens to turn any Israel-Iran conflict into a broader regional war.

4. Strategic Military Preparations: Both sides had been signaling their readiness for confrontation. Israel had reportedly established covert drone bases inside Iran and conducted extensive intelligence operations, while Iran had threatened to target U.S. military bases across the region if attacked.

While the tensions have been rising, it still looks like many people were caught off guard and are now looking for more details.

The below chart shows when people searched for both countries online (originally featured on GoldPriceForecast.com).

I’m using it as a proxy for tensions between them and to some extent also in the Middle East in general.

This data is important as it allows us to analyze what happened, when markets were reacting to similar events.

There were several cases when those were on the rise recently. Let’s investigate what happened in the markets in those cases.

The thin lines represent cases when Iran was searched for, and the thick lines represent cases when both: Iran and Israel were searched for.

The colors of the lines represent the short-term impact on mining stocks and silver.

That’s very interesting is that in 1/3 of cases we saw rallies in the immediate aftermath, in 1/3 of cases, we saw declines, and in the remaining 1/3 of cases, we saw price action that was rather unclear.

Silver and Miners: A “Non-Event” Amidst Turmoil?

So, to make a long story short, it seems that today’s event is actually a non-event for silver and miners.

Yes, gold will react to geopolitical turmoil, but:

a)     Other markets are not necessarily going to do the same thing

b)     The impact is likely to be temporary

c)     If you have gold in your IRA, you’re well set for those situations (and you get the tax benefits) – trading miners and silver sometimes (like right now) against the insurance part of the portfolio or against the above-mentioned investment vehicle would provide a specific hedge, where the declines are still likely to be magnified by miners and silver while one is protected against the geopolitical-turmoil-based rallies.

Meanwhile, platinum appears to have topped, just as I had indicated less than 48 hours ago.

That’s one of the signs that the tide is likely turning. Following today’s rally in gold might therefore yield only very temporary results, and trusting in rallies in other markets might simply be a bad idea.

Thank you for reading my today’s analysis – I appreciate that you took the time to dig deeper and that you read the entire piece. If you’d like to get more (and extra details not available to 99% investors), I invite you to stay updated with our free analyses – sign up for our free gold newsletter now.

Thank you.

Przemyslaw K. Radomski, CFA
Founder, Editor-in-chief