Silver prices (XAG/USD) fell nearly 10% on Tuesday, driven by a stronger US Dollar and rising US Treasury yields, which reduced demand for non-USD assets. The US Dollar Index (DXY) climbed to 98.5, making dollar-denominated commodities like silver less attractive to investors. Despite heightened geopolitical tensions between the US and Iran, markets prioritized USD safety over physical commodities. The 10% drop marks one of the largest single-day declines in silver since 2013. The decline highlights the inverse relationship between the US Dollar and commodities. As the Federal Reserve signals potential rate hikes, Treasury yields rose to 1.75%, further pressuring silver. Traders are now monitoring central bank policies and inflation data for clues on USD trajectory. Silver’s technical indicators show a breakdown below key support at .50, raising concerns about further losses. For Gulf and MENA investors, the drop underscores the vulnerability of commodity-linked portfolios to USD fluctuations. With Saudi Arabia’s currency pegged to the USD, local investors face dual risks from both dollar strength and global commodity price swings. Key watchpoints include the Fed’s December policy meeting and OPEC+ supply decisions, which could influence both USD and silver prices in the coming weeks.
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