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Silver prices fell for the third consecutive trading day, dropping over 3.32% on Friday as the US Dollar gained strength and US Treasury yields rose following the Federal Reserve's hawkish stance. The decline pushed silver below its 200-day simple moving average (SMA), a key technical level that often signals a shift in market sentiment. Analysts note that the Fed's tightening cycle and the resulting higher yields are pressuring non-yielding assets like silver, which typically struggles against a robust Dollar. This move could attract short-term sellers targeting the $61 level as a potential support zone.
The bearish momentum in silver highlights the broader impact of central bank policies on commodity markets. Traders are closely monitoring the Fed's policy trajectory, as prolonged high interest rates may prolong the Dollar's dominance and weigh on silver prices. Additionally, the breakdown below the 200-day SMA may trigger further technical selling, especially if the $61 level fails to hold. Market participants should watch for follow-through selling or potential short-term rebounds driven by profit-taking in the Dollar.
For MENA investors, the weakening of silver underscores the challenges of holding commodities in a high-rate environment. Regional traders may need to reassess their exposure to precious metals and consider hedging strategies against Dollar volatility. Key indicators to monitor include upcoming Fed speeches, inflation data, and the Dollar Index (DXY), which could provide clues about the sustainability of the current bearish trend in silver.
