Spot Silver rose more than 2% on Friday, erasing a loss from the prior trading day, but was still on course for a weekly drop, as the US Dollar remained firm amid the escalating Middle East conflict and rising inflation fears.
Israel has launched a cannonade of strikes on Tehran on Thursday, targeting infrastructure that belongs to the Iranian authorities, while Tehran launched another wave of missile and drone attacks across the Gulf.
Market players also grappled with rising oil and gas prices, which revived inflation fears and supported bets that the Federal Reserve will likely delay interest rate cuts. This, along with strong US macro data provided support to the US Dollar at the expense of other safe-haven assets.
A firmer dollar makes dollar-priced Silver less appealing to international investors holding other currencies.
Investors now turn their attention to the key Non-Farm Payrolls report for fresh clues over the Fed’s policy path.
Investor expectations for the next Fed rate cut have now been pushed back to September or October.
Spot Silver was last up 2.43% on the day to trade at $84.23 per troy ounce.
The white metal was set for an 11.35% weekly loss, its steepest one since late January.
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