Key Takeaways:
- Silver price retreats from day’s high after reports of limited airstrike from Israel on Iran.
- Fed’s hawkish guidance fails to push US bond yields higher.
- Fed Williams is open to more rate hikes if inflation persists.
Silver Price Falls Amid Geopolitical Uncertainty
Silver price (XAG/USD) is slipping back while attempting to breach the key resistance level of $29.00 in the European session on Friday. The decline comes after reports from the Middle East of Iran’s air defense destroying three drones flown by the Israeli army. Israel has not confirmed whether these attacks were in retaliation to Iran’s airstrike on their state.
Market Volatility and Safe-Haven Demand
Despite the retreat in silver price, the near-term outlook remains positive as worsening geopolitical tensions are likely to sustain safe-haven demand. Global markets are showing mixed reactions, with risk-perceived currencies recovering losses while equities remain under pressure.
US Bond Yields and Fed Policy
US bond yields have fallen despite the Federal Reserve’s inclination towards maintaining higher interest rates. The decline in yields reduces the opportunity cost of investing in assets like silver. New York Fed President John Williams stated that the central bank is prepared to increase rates further if inflation persists.
US Dollar Index and Silver Technical Analysis
The US Dollar Index is stable around 106.00 as Fed policymakers support higher interest rates to combat inflation. Silver price remains range-bound between $28 and $29, indicating potential for volatility in either direction. The Relative Strength Index (RSI) shows indecision among traders.