Silver Under Pressure, Interest Rate Risks Strengthen
Silver prices held steady around US$55.50 per troy ounce on Friday (July 17th), but remained on track for a weekly decline of nearly 7%. The main pressure came from rising interest rate expectations, despite persistent geopolitical tensions in the Middle East.
US-Iran tensions continued to keep oil prices high. Iran reportedly asked the Houthi group in Yemen to prepare to block Red Sea oil shipping routes if the United States attacks Iranian energy infrastructure. At the same time, several explosions were also reported in several Iranian cities.
Risks to global energy supplies have renewed market concerns about a new wave of inflation. If oil prices continue to rise, major central banks could potentially keep interest rates high for longer to contain price pressures.
From the United States, recent economic data reinforced this view. Initial Jobless Claims fell to 208,000, better than expected, while the Philadelphia Fed Manufacturing Index rose to its highest level since November 2021. This data suggests the US economy remains quite resilient.
Several Fed officials also remained cautious. Dallas Fed President Lorie Logan assessed that inflation progress was insufficient, while Fed Vice Chairman Philip Jefferson left open the possibility of an interest rate hike if inflation fails to slow further.
As a result, silver is still struggling to gain a strong boost, despite persistent safe-haven demand. As long as oil prices are high, inflation is at risk of rising again, and the Fed remains open to tighter policy, XAG/USD has the potential to remain under pressure in the short term. (arl)
Source: Newsmaker.id
