Silver Drops Ahead of FOMC Minutes, US-Iran Geopolitics a Hold
Silver (XAG/USD) opened the week on weak footing and fell back to $76.35/oz, down around -1.4% from its previous close, as the market took profits and reassessed the direction of US interest rates. Movements also tended to be choppy due to thin liquidity amid a market holiday on Monday (February 16th).
From a fundamental perspective, US inflation has indeed eased—January CPI rose 0.2% (MoM) after the previous 0.3% increase, reinforcing the narrative that price pressures are easing. However, the market is hesitant to be aggressively bullish on precious metals as the Fed remains in a wait-and-see mood, especially as employment data remains relatively resilient.
On the other hand, a slight strengthening US dollar has also put pressure on USD-denominated precious metals, making silver relatively more expensive for non-dollar buyers. However, the dollar's room for strength is also considered limited as expectations of easing remain alive for the second half of the year—so silver's decline could potentially be contained as long as there is no catalyst that significantly changes interest rate pricing.
From a geopolitical perspective, US-Iran tensions remain a factor restraining the downside: any escalating headlines can quickly revive safe-haven demand—although daily sentiment remains weighed down by the dollar, risk-on/risk-off, and interest rate issues.
Source: Newsmaker.id
