The U.S. Dollar Index (DXY) climbed to 104.20, its highest level in two weeks, pressuring commodities priced in dollars. Meanwhile, the U.S. 10-year Treasury yield rose to 4.35%, further reducing gold’s attractiveness.
Silver Holds Steady Despite Market Volatility
Unlike gold, silver (XAG/USD) showed resilience, trading at $31.68 with an intra-day high of $31.75. The metal benefits from its dual role as both a safe-haven asset and an industrial commodity, helping it maintain stability despite gold’s decline.
“Silver’s industrial demand component, particularly in solar and technology sectors, provides a fundamental support level,” noted David Meger, director of metals trading at High Ridge Futures.
However, prolonged high U.S. interest rates remain a risk, potentially capping silver’s gains.
Trade Tariffs and Inflation Fears Weigh on Market Sentiment
The implementation of new U.S. tariffs—25% on Mexican and Canadian imports and a 10% levy on Chinese goods—has triggered concerns of an escalating trade war. Canada responded with retaliatory tariffs, while China signaled potential countermeasures.
Additionally, U.S. economic data continues to highlight inflation risks. The ISM Manufacturing PMI fell to 50.3 in February from 50.9, signaling slowing growth, while the Prices Paid Index surged to its highest level since mid-2021, reinforcing expectations that inflation remains persistent.