Shock in the silver market.. Why did the white metal decline despite global tensions?
Silver topped the news headlines today, Monday, after a sharp decline of about 7% before reducing its losses to about 5%, while it stabilized Silverdeclined this time.
Why did silver prices decline?
This decline is due to the dual nature of silver; Unlike gold, which has a cash value of 90%, silver is still 50% linked to industrial demand, which is currently experiencing strong turmoil under the weight of the risk of global supply chains being disrupted.
With the gold-to-silver trading ratio rising within a few hours, major investment institutions abandoned their positions in silver to cover margin calls on the collapsed stock indices.
Despite the precious metals market reacting immediately to the news of the US-Israeli strikes on Iran, traders rushed to Buying gold and silver, but within hours, rising US Treasury yields, a strong US dollar, and technical resistance levels capped the rise.
Interest rates and oil weigh on silver
Aside from Middle East tensions, traders are still assessing the path of US interest rates; Even in light of geopolitical instability, markets believe that the Federal Reserve may keep interest rates low to control inflation, which reduces the attractiveness of non-yielding assets such as silver and gold.
On the other hand, developments in the Energyto change market sentiment, as the coalition decided "OPEC+" Raising oil production to compensate for any potential supply disruption. The move eased immediate fears of supply-driven inflation, which relatively dampened demand for the metals.
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