Safe-Haven Wavers: Silver Rebounds
Silver prices (XAG/USD) weakened again in the European session on Tuesday (February 10th), after strengthening for the previous two days. Silver was last trading around $81.6/oz, down around 2.1% from the previous close—the market is still prone to a "tug-of-war" as precious metal volatility has not subsided.
Today's pressure is widely interpreted as profit-taking. After yesterday's sharp spike, traders are opting to secure profits, especially ahead of the release of US economic data that could cause aggressive movements in the dollar and yields—two factors that often cause precious metals to fluctuate.
In terms of global sentiment, US-Iran tensions continue to fuel safe-haven sentiment, but in a mixed direction. The US issued new guidelines for US-flagged vessels transiting the Strait of Hormuz, advising them to stay away from Iranian territorial waters—a sign that the market still views geopolitical risks as unresolved.
On the policy front, the market is also weighing the Fed's interest rate path. Most market participants still predict a March hold, while the likelihood of a cut is greater toward mid-year. Because silver is a non-yielding asset, changes in interest rate expectations are often directly reflected in its price.
Tonight's next focus: US Retail Sales data, followed by a series of other major data (employment and inflation) that will determine whether the market continues to be risk-on or turns defensive—which usually determines whether silver continues to correct or rebounds.
Source: Newsmaker.id
