Silver Weakens Despite Heated Geopolitics
Silver prices (XAG/USD) continued to weaken for the second consecutive session. In European trading on Tuesday (March 3), at 08:49 GMT, XAG/USD was trading around $86.2 per troy ounce, down around 4%, amid continued high volatility due to rising global uncertainty.
The main pressure came from the strengthening US dollar and rising US bond yields, which reduced the attractiveness of dollar-denominated precious metals for non-USD buyers. The 10-year US Treasury yield hovered around 4.06%–4.07%, increasing the opportunity cost of holding non-yielding assets like silver, despite initial strong demand for safe-haven assets.
From a geopolitical perspective, the market remains clouded by the escalating conflict in the Middle East, which has triggered a shift to risk-off mode. Reuters reported that relevant authorities stated that ships were being prevented from passing through the Strait of Hormuz, while shipping disruptions in the region have made global energy and logistics shipments increasingly sensitive to the latest developments.
Rising energy supply risks have the potential to keep oil prices high and reignite inflation concerns, ultimately influencing expectations for the Fed's monetary policy. In this scenario, silver faces a trade-off: on the one hand, it's supported by the safe-haven narrative, but on the other, it's held back by a strong USD and rising yields—making recovery likely limited as long as geopolitical and inflationary uncertainty continue to dominate market sentiment.
Source: Newsmaker.id
