The US Dollar Index (DXY) rose to 104.20, rising to the highest level in two weeks, putting pressure on priced goods. Meanwhile, the US's 10-year financial yield rose to 4.35%, further reducing the appeal of gold.
Despite market volatility, silver is stable
Unlike gold, Silver (XAG/USD) showed resilience, trading at $31.68 with a daily high of $31.75. Metals benefit from their dual roles as both safe haven assets and industrial goods, and help maintain stability despite the decline in gold.
“The industrial demand components of silver, especially the solar and technology sector elements, provide a basic level of support,” said David Megger, director of metal trading at High Ridge Futures.
However, long-term interest rates in the US remain risky and could curb silver's profits.
The fear of trade tariffs and inflation overpowers market sentiment
The implementation of new US tariffs, which is a 25% collection of Mexican and Canadian imports and 10% collection on Chinese goods, has sparked concerns about escalating the trade war. Canada responded with retaliatory tariffs, while China signaled potential measures.
Furthermore, US economic data continues to highlight inflation risks. ISM Manufacturing PMI fell from 50.9 to 50.3 in February, slowing growth from 50.9, but prices surged to the highest levels from mid-2021, strengthening expectations that inflation would be sustainable.
