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Silver prices (XAG/USD) declined over 2.5% to trade near $73.80 during Asian hours on Monday, ending a five-day rally. The drop follows fading expectations of Federal Reserve rate cuts and a surge in oil prices, which reduced demand for silver as an inflation hedge. Analysts note that the Fed’s dovish stance has weakened, with markets pricing in only one rate cut by year-end, while rising oil costs are dampening industrial demand for silver.
The decline in silver prices impacts investors using the metal as a safe-haven asset. A weaker dollar and inflationary pressures typically support silver, but current dynamics suggest a bearish bias. Traders should monitor the Fed’s policy signals and oil price movements, as these factors could dictate silver’s near-term direction. A break below $73.00 may trigger further technical selling, while a rebound above $75.00 could signal a reversal.
For Gulf investors, the interplay between global monetary policy and energy markets is critical. Persistent oil volatility and delayed Fed rate cuts could prolong silver’s downward trend. Key levels to watch include $73.00 support and $75.00 resistance. Broader market sentiment, including geopolitical risks and economic data, will also influence the trajectory of precious metals in the region.
