In Friday’s European session, silver price (XAG/USD) faced resistance as it attempted to breach the crucial level of $29.00, reversing from early gains prompted by reports from the Middle East regarding military actions between Iran and Israel.
The white metal surrendered its initial advances following reports that Iran’s air defense had intercepted three drones allegedly operated by the Israeli army. Despite these events, Israel has yet to confirm any retaliatory attacks in response to an earlier airstrike by Iran.
While the near-term outlook for silver remains firm amidst escalating geopolitical tensions, global markets have displayed mixed reactions. Risk-perceived currencies rebounded from losses recorded in early Asian trading, while global equities remained under pressure, with S&P 500 futures posting notable declines during the European session.
Furthermore, interest-bearing assets from the United States saw yields plummet, despite the Federal Reserve (Fed) leaning towards maintaining higher interest rates for an extended period. The 10-year US Treasury yields fell to 4.59%, reducing the opportunity cost of investing in bullion.
New York Fed President John Williams echoed this sentiment on Thursday, stating that he sees no urgency for rate cuts and emphasizing the Fed’s readiness to hike rates again if data indicates persistent inflationary pressures.
Amidst these developments, the US Dollar Index (DXY) held ground around the 106.00 level. Fed policymakers have expressed support for keeping interest rates elevated, citing stubbornly high inflation fueled by tight labor market conditions.
