FX.co ★ Silver Holds Above $86

Silver climbed above $86 per ounce on Thursday as investors weighed safe haven demand driven by escalating conflict in the Middle East against the drag from a stronger US dollar and rising Treasury yields. Although forced liquidations triggered by margin calls amid equity market declines have injected volatility into precious metals, the geopolitical risk premium remains a key source of support.

February consumer price data confirmed that inflationary pressures remain stubborn, and when combined with surging oil prices, has tempered market expectations for imminent interest rate cuts by the Federal Reserve. The jump in the 10-year Treasury yield to a five-week high has created a difficult backdrop for non-yielding assets such as silver, yet continued institutional participation is helping to underpin prices.

Market participants are now turning their attention to the upcoming personal consumption expenditures (PCE) index to assess whether the current inflation trend will prompt a lasting shift in central bank policy or prove to be a more transitory phenomenon.