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Silver prices (XAG/USD) fell by 3.5% on Thursday as the US Dollar regained strength and Treasury yields stabilized after softer-than-expected US inflation data reduced pressure on the Federal Reserve to cut rates. The metal is currently testing the $55 psychological level, a key support area for technical analysts. The decline follows a broader trend of industrial metals weakening amid reduced speculative demand and a stronger USD, which often inversely correlates with commodity prices.
For traders, this development highlights the USD's dominance in driving commodity markets. A break below $55 could trigger further selling, potentially targeting $53.50 as the next support. Conversely, a rebound above $58 may signal short-term stabilization. The key focus for markets will be upcoming US inflation data and central bank policy signals, which could shift USD dynamics.
Investors in the Gulf and MENA region should monitor the USD's performance against the EUR and the trajectory of global inflation. Silver's volatility also makes it sensitive to geopolitical risks and industrial demand shifts, particularly from emerging markets. Traders are advised to watch for potential support/resistance levels and central bank gold-buying trends that might indirectly affect silver prices.
