Dollar and Middle East Risks Put Silver Under Pressure!
Silver prices (XAG/USD) opened the week lower, hovering near the lower end of the week's trading range. In Monday's Asian session, silver remained above $68.00, but fell nearly 2% and appeared vulnerable to further correction if pressure persists.
Risk-off sentiment has strengthened again as the US-Iran conflict enters its fifth week, boosting demand for the US dollar as a safe haven. A stronger dollar typically puts pressure on USD-denominated commodities, including silver, as it becomes more expensive for non-dollar buyers.
On the geopolitical front, reports indicate the Pentagon is preparing a multi-week ground operation in Iran, including potential attacks on Kharg Island and coastal locations near the Strait of Hormuz. Iran has stated its readiness to retaliate if US forces are deployed. Meanwhile, the Iran-aligned Houthi group claimed two missile launches at Israel in 24 hours and warned of further attacks, raising the risk of global trade disruptions around Bab el-Mandeb.
This escalation supported oil prices and heightened inflation concerns, which in turn raised expectations that central bank policy would remain hawkish. The market is said to have discounted the possibility of further interest rate cuts by the Fed, and is even starting to increase the likelihood of a rate hike by the end of the year—conditions that generally benefit the dollar and pressure non-yielding silver.
Technically, the recent sideways movement is viewed as bearish consolidation after silver broke below the 100-day SMA, so the directional bias remains down. However, confirmation of weakness typically awaits a clearer break below the range boundary before the market positions itself for further declines. (asd)
Source: Newsmaker.id
