Silver Under Pressure, "Higher for Longer" Interest Rates Loom
Silver prices (XAG/USD) weakened in the US session on Thursday (April 16), with XAG/USD last at US$78.43, down 0.66%.
The movement is likely to be "wait and see" as the market weighs the latest signals regarding the possibility of a US-Iran deal and the option of extending the ceasefire, which could reduce demand for safe-haven assets. However, uncertainty remains high as core issues—especially the nuclear issue—remain a point of divergence.
In terms of market transmission, energy dynamics remain crucial for precious metals. Disruptions related to the Strait of Hormuz keep energy-based inflation risks alive despite a brief correction in oil prices, potentially making monetary policy easing more difficult.
Similarly, comments from Fed officials emphasized the importance of monitoring the duration of the energy shock and its spillover effects to core inflation. For silver, the combination of geopolitical uncertainty and expectations of "tighter for longer" interest rates are likely to limit upside, while any credible diplomatic progress could quickly reduce the risk premium.
The variables most closely monitored by the market are: headlines from US-Iran negotiations, any apparent changes in Hormuz shipping conditions, the direction of oil prices, and the Fed's latest signals regarding core inflation. (Arl)
Source: Newsmaker.id
