Silver Approaches $78, Safe Haven vs. Dollar Pulling Against Each Other
Silver prices (XAG/USD) continued their rally for the second consecutive session, hovering around $78 per troy ounce in Asian trading on Thursday. This increase was driven by increased demand for safe haven assets amidst ongoing geopolitical tensions.
Safe haven sentiment strengthened as US-Iran talks failed to produce a breakthrough. Tehran claimed there was a "general understanding" regarding the framework for nuclear negotiations, but US officials believe Iran has not met several of Washington's demands, while the option of military action remains under discussion at the political level.
On the other hand, global conflict and uncertainty also added support for silver. Geopolitical tensions typically increase interest in precious metals, especially when markets assess the risk of escalation that could disrupt regional stability and trigger a shift in funds to defensive assets.
However, silver's upside is potentially limited by a strengthening US dollar. The dollar has tended to stabilize after its previous gains, helped by hawkish signals from the FOMC meeting minutes, which have led markets to hold back expectations of a rapid interest rate cut.
The FOMC minutes also revived the scenario that interest rate hikes are still possible if inflation remains high, although some also left open the possibility of easing if inflation declines as expected. This combination of messages typically pushes US yields higher, which increases the "opportunity cost" of holding non-yielding assets like silver, while making silver more expensive for non-dollar buyers. (asd)
Source: Newsmaker.id
