Silver Trims Decline After Pressure
Silver prices recovered on Wednesday (April 1st) after earlier pressure, trading around $75 per ounce. This recovery was driven by a weakening US dollar and changing geopolitical signals in the Middle East. Although silver continued its sharp decline from March, it managed to recover from its recent low after the US dollar index fell from its ten-month high.
President Donald Trump stated that Iran had requested a ceasefire, but emphasized that the US would only consider a deal if the Strait of Hormuz was fully functional and secure. He also warned of the possibility of further escalation if attacks on ships continued. These statements maintained volatility in commodity markets, while oil prices fluctuated after a brief decline, and 10-year Treasury yields remained unchanged despite a significant increase last month.
However, despite the recovery, silver prices remain well below record highs. Data showing strong US employment and retail sales indicate that the US economy remains robust, reducing demand for precious metals like silver as a safe haven.
Cause and Effect:
The primary cause of the silver price recovery was the decline in the US dollar, triggered by news of a potential de-escalation of the war in the Middle East, particularly with Iran's ceasefire request. Furthermore, US economic data showing stable employment and retail sales growth also helped support the perception that the US economy is relatively strong despite geopolitical uncertainty. As a result, silver regained support but remained below its previous highs as the market worried about the impact of prolonged interest rate hikes by the Federal Reserve on the appeal of precious metals.
Source: Newsmaker.id
