Silver price retreats from its all-time high as interest in safe-haven assets decreases

Silver Prices Retreat After Reaching Record Highs

On Thursday, Silver (XAG/USD) was trading near $91.70 per ounce, marking a 1.70% decline for the day. Earlier, the precious metal had surged to a new record high, approaching $94. The recent downturn is attributed to investors securing profits and a decrease in demand for safe-haven assets.

This decline in Silver's value coincides with a reduction in geopolitical tensions. US President Donald Trump indicated that reports from Iran suggest a decrease in crackdown-related fatalities and no imminent threat of mass executions. These developments have temporarily eased concerns over potential military conflict, diminishing the attractiveness of safe-haven investments like Silver.

Additionally, robust US economic data has put further pressure on the non-yielding metal. Stronger-than-anticipated macroeconomic indicators have reinforced expectations that the Federal Reserve may maintain current interest rates for the foreseeable future. This sentiment has bolstered the US Dollar (USD), which in turn has weighed on precious metals such as Silver that are sensitive to changes in real yields.

On the trade policy front, the US government's decision not to introduce new tariffs on key mineral imports has also contributed to easing trade-related anxieties, thereby reducing defensive buying of Silver.

Despite the present pullback, the medium-term outlook for Silver remains positive. Analysts at OCBC highlight that Silver has achieved significant gains since the beginning of the year, driven by ongoing supply shortages, strong industrial usage, and positive momentum from Gold. These underlying factors are helping to keep XAG/USD trading at historically high levels, even as short-term corrections are likely to occur.