Key Takeaways:
Silver prices fell more than 2 percent on Monday, dipping below $28.00 per ounce as a rally in the U.S. dollar and expectations of sustained high interest rates diminished the appeal of non-yielding precious metals. The move came as renewed geopolitical tensions in the Middle East prompted a flight to safety, strengthening the greenback against a basket of major currencies.
"The dollar's safe-haven status is on full display," said Gregor Stuart Hunter, a correspondent for Thomson Reuters. "Weekend developments may temper the optimism we saw at the end of last week."
The U.S. Dollar Index (DXY), which measures the greenback against six other currencies, rose 0.3 percent to 98.485, its highest level since April 13. The euro declined 0.3 percent to $1.1731, while the British pound also fell 0.3 percent to $1.3480. The dollar gained 0.2 percent against the Japanese yen, trading at 158.945.
The shift in market sentiment follows reports of the U.S. military seizing an Iranian cargo ship, which overshadowed previous hopes for a ceasefire. The geopolitical uncertainty also impacted other commodities, with Brent crude futures jumping 7 percent to $96.94 a barrel. Analysts at Westpac noted that the weekend's events would likely temper any optimism for a swift resolution in the region.
This article is for informational purposes only and does not constitute investment advice.
