Key Moments
- XAG/USD trades near $72.90 during Asian hours on Thursday. However, safe-haven demand is easing on Middle East peace hopes.
- Silver is still on track for a second weekly gain. In fact, it has risen more than 7% as markets reassess the Fed’s policy path.
- The Fed kept rates at 3.50%-3.75% after its March 2026 meeting. Meanwhile, the dot plot signals one 25-basis-point cut later this year.
Safe-Haven Demand Cools, Weighing on XAG/USD
Silver prices (XAG/USD) continue to fall after small losses in the previous session. The metal trades near $72.90 during Asian hours on Thursday. This decline reflects weaker demand for safe-haven assets. Investors are growing more confident about possible peace in the Middle East.
US President Donald Trump said Iran’s military capabilities have weakened significantly. He noted that missile and drone capacity has been reduced. He also said the US no longer depends on Middle Eastern oil. In addition, he stressed that Iran’s naval and air forces have suffered heavy losses. As a result, operational strength has declined. He also signaled that the US aims to end the conflict quickly.
Stronger Dollar Caps Silver, Even as Risk Premium Eases
Silver is falling as the US Dollar (USD) rebounds after two days of losses. Because silver is priced in dollars, a stronger USD makes it more expensive for foreign buyers. As a result, demand weakens.
However, gains in the Greenback may remain limited. Easing tensions in the Middle East reduce demand for safe-haven assets. Therefore, the USD may struggle to extend its rally.
Weekly Performance and Fed Repricing Support the Metal
Despite the recent dip, silver still shows strength on a weekly basis. It is heading for a second straight weekly gain. So far, prices have risen more than 7%. Investors continue to reassess US monetary policy. At the same time, they weigh geopolitical risks, growth concerns, and inflation pressures.
Federal Reserve Decision and Rate Expectations
The Federal Reserve kept its benchmark rate unchanged at 3.50%-3.75% after its March 2026 meeting. The median dot plot still points to one 25-basis-point cut later in 2026. However, some policymakers now expect no rate cuts this year.
US Treasury yields are moving higher. Both 2-year and 10-year yields continue to rise. Strong economic data supports the view that rates may stay elevated for longer. Meanwhile, St. Louis Fed President Alberto Musalem said current policy is well positioned. He added that it may remain unchanged for some time.
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