Spot Silver rebounded more than 4% on Wednesday, after a two-day streak of losses, amid likely bargain hunting and as ongoing Middle East hostilities brought forth concerns over a protracted conflict in the region.
Yet, a firmer US Dollar was capping the metal’s upside.
Yesterday Israel struck a building where clerics were meeting to elect a new Supreme Leader, as the war on Iran entered its fifth day.
The conflict’s outcome remains uncertain, with US President Donald Trump voicing concern that the attacks could lead to the emergence of a new Iranian leadership as troubling as the preceding regime.
The US Dollar held not far from a more than five-week high amid concerns that rising energy costs could reignite inflation. This has prompted a reassessment of the Federal Reserve’s monetary policy path.
A firmer dollar makes dollar-priced Silver less appealing to international investors holding other currencies.
“The inflation channel is biting harder. The market isn’t just repricing geopolitics; it’s repricing energy logistics, security premia, and longer-lasting inflation pressure, which is a tougher backdrop for risk assets than a simple growth scare,” Charu Chanana, Chief Investment Strategist at Saxo, was quoted as saying by Reuters.
“Policy offsets look less credible in real time and talk of ‘escorting ships’ or easing energy costs doesn’t solve the core issue if Hormuz transit is contested and energy infrastructure is increasingly in the line of fire – that keeps the risk premium sticky.”
Spot Silver was last up 4.74% on the day to trade at $85.94 per troy ounce.
TradingPedia.com is a financial media specialized in providing daily news and education covering Forex, equities and commodities. Our academies for traders cover 
