- The price of silver falls sharply despite the fact that tensions in the Middle East have climbed.
- The United States has pointed out the possibility of attacking Iran in the next few days.
- The Fed maintained stable interest rates in the range of 4.25% -4.50% on Wednesday.
The price of silver (XAG/USD) has dropped almost 1% to about 36.25 $ during Thursday’s European negotiation hours. The white metal faces a strong sales pressure despite the fact that geopolitical tensions in the Middle East region have climbed after the United States (USA) points out that it is preparing to attack Iran.
Theoretically, the increase in geopolitical tensions improves the demand for shelter assets, such as silver.
According to a Bloomberg report, senior US officials are preparing for the possibility of an attack on Iran in the next few days. Washington’s assault would accelerate geopolitical uncertainty. Since the US is the world’s largest economy, its active participation in a conflict with any nation would significantly reduce appetite due to the risk of investors.
Meanwhile, a certain strength in the US dollar (USD) is weighing on the price of silver. Technically, a higher US dollar makes the price of silver a expensive bet for investors.
The US dollar index (DXY), which tracks the value of the dollar against six main currencies, reaches a new weekly maximum about 99.10.
The US dollar gains ground due to tensions in the Middle East and the reviewed projections of interest rates by the Federal Reserve (Fed) in its advertisement of monetary policy on Wednesday. As was widely anticipated, the FED maintained its stable reference interest rates in the range of 4.25% -4.50% per fourth consecutive meeting. The US Central Bank reviewed its objective of interest rates for 2026 and 2027 to 3.4%, citing upward risks for inflation due to the repercussions of the new commercial policy of US President Donald Trump.
“Many companies expect to transfer part or the entire effect of consumer tariffs,” said Fed President Jerome Powell, during the press conference after the decision on interest rates. Powell added that “we have had an inflation of goods that has risen a bit and we hope to see more of that in summer.”
Technical Analysis of La Plata
The price of silver fights to extend its increase after reaching a new maximum in more than a decade about 37.32 $. However, the short -term white metal trend remains bullish since it remains above the 20 -day exponential (EMA) mobile average, which is negotiated around $ 35.40.
The 14 -day relative force (RSI) index descends to about 60.00. A new bullish impulse would arise if the RSI remains above that level.
Looking down, the minimum of October 22 around $ 34,87 will act as a key support zone. On the positive side, the maximum of June 18, $ 37,32 will act as a key obstacle.
GRAPH DIARY OF LA PLATA
FAQS SILVER
Silver is a highly negotiated precious metal among investors. Historically, it has been used as a value shelter and an exchange means. Although it is less popular than gold, operators can resort to silver to diversify their investment portfolio, for their intrinsic value or as a possible coverage during periods of high inflation. Investors can buy physical silver, in coins or bullion, or negotiate it through vehicles such as the funds quoted in the stock market, which follow their price in international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can cause the price of silver to shoot due to its safe refuge status, although to a lesser extent than that of gold. As an asset without performance, silver tends to climb with lower interest rates. Its movements also depend on how the US dollar (USD) behaves, since the asset is quoted in dollars (XAG/USD). A strong dollar tends to maintain the price of silver at bay, while a weaker dollar probably drives rising prices. Other factors such as investment demand, mining – silver supply is much more abundant than gold – and recycling rates can also affect prices.
Silver is widely used in the industry, particularly in sectors such as electronics or solar energy, since it has one of the highest electrical conductivities of all metals, surpassing copper and gold. An increase in demand can increase prices, while a decrease tends to reduce them. The dynamics in US economies, China and India can also contribute to price fluctuations: for the US and particularly China, its large industrial sectors use silver in several processes; In India, the demand for consumers for precious metal for jewelry also plays a key role in pricing.
Silver prices tend to follow gold movements. When gold prices go up, silver typically follows the same path, since their status as shelter is similar. The gold/silver ratio, which shows the number of ounces of silver necessary to match the value of an ounce of gold, can help determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that silver is undervalued, or that gold is overvalued. On the contrary, a low ratio could suggest that gold is undervalued in relation to silver.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
