Iran Tensions Ease, Silver Loses Appeal
Silver prices (XAG/USD) continued their decline for the second consecutive session on Friday, as safe-haven interest began to fade. In recent trading, XAG/USD was hovering around $91 per troy ounce after high volatility throughout the week.
Pressure stems from easing geopolitical tensions. US President Donald Trump has signaled a more "wait-and-see" approach to Iran after assurances that further violence and mass executions will not continue. Other reports also suggest that several regional allies are urging Washington to delay any action to avoid escalation and potential retaliation. (The result: reduced demand for safe-haven assets like silver.)
On the monetary policy front, silver has also lost steam as markets become more comfortable with the Fed holding interest rates for longer. US Initial Jobless Claims unexpectedly fell to 198,000 (below expectations of 215,000), confirming the continued solidity of the labor market—a situation that typically supports the dollar and puts pressure on non-yielding precious metals.
Interest rate contracts also reinforce the "hold on" narrative: the likelihood of the Fed holding rates at its January 27-28 meeting is highly anticipated, and expectations for the next rate cut have largely shifted to June or later.
Beyond that, improving risk sentiment is also supported by Trump's market-reassuring comments about the Fed, as well as news of US-Taiwan trade cooperation highlighting semiconductors. The combination of risk-on sentiment and a persistently strong dollar makes silver more vulnerable to corrections, although short-term movements remain sensitive to geopolitical headlines and subsequent US data.
Source: Newsmaker.id
