Silver Under Pressure, Hawkish Fed Curbs Precious Metals Interest
Silver prices weakened on Friday (June 19th), hovering around $64.95 per ounce according to Twelve Data, with a daily range of $63.31 to $65.92. Trading Economics also noted silver was at $64.77 per ounce, down about 1.35% on the day, while Reuters reported spot silver weakened to $65.11 per ounce. Small differences between data providers reflect variations in update timing and quotation basis.
The main pressure continues to stem from changing expectations regarding US monetary policy. The Federal Reserve held interest rates unchanged at its most recent meeting, but policymakers' projections indicate some officials still see the need for a rate hike this year. This reinforces the higher-for-longer narrative and puts pressure on non-yielding assets like silver.
A stronger US dollar also posed a drag on precious metals. When the greenback strengthens, dollar-priced silver becomes more expensive for foreign buyers. This transmission creates pressure on interest rates not only from opportunity costs but also from global demand.
From a geopolitical perspective, safe-haven support for silver also eased after Israel and Hezbollah reportedly agreed to a ceasefire on Friday. The partial easing of conflict risks helped improve risk appetite and reduced the market's need for defensive assets.
However, the risk of energy inflation has not completely disappeared. The restoration of oil and LNG flows through the Strait of Hormuz could still take time, so energy price volatility remains a key factor in inflation expectations. However, this factor is not yet strong enough to offset the pressure from the prospect of tighter US interest rates.
The market's next focus will be on US inflation data, the direction of the dollar, Treasury yields, and developments regarding the ceasefire in the Middle East. As long as the Fed remains hawkish and the dollar remains strong, silver has the potential to remain defensive, even if geopolitical risks remain unabated. (arl)
Source: Newsmaker.id
