- Silver price weakens as safe-haven demand fades amid easing geopolitical risks.
- President Trump said he stepped back from military threats after assurances that killings and executions would stop.
- Silver’s safe-haven demand weakens as risk appetite improves after Trump said he won’t dismiss Fed Chair Powell.
Silver price (XAG/USD) extends its losses for the second successive session, trading around $91.00 during the European hours on Friday. Silver price loses ground amid decreasing safe-haven demand, which could be attributed to easing concerns over geopolitical risks and Federal Reserve (Fed) independence.
US President Donald Trump said he had stepped back from threats of military action after receiving assurances that further killings would not occur and executions would be halted. Market sentiment was also supported by reports that Israel and other regional allies urged Washington to delay any action, amid concerns over potential retaliation.
The safe-haven demand for Silver weakens as the risk-on mood improves after President Trump said he has no plans to dismiss Fed Chair Jerome Powell despite reported Justice Department indictment threats. Moreover, the US and Taiwan signed a trade agreement on Thursday aimed at boosting American semiconductor production in exchange for lower tariffs.
Silver, a non-interest-bearing asset, loses its shine as Thursday’s US Initial Jobless Claims data reinforced the likelihood that the Fed will keep interest rates on hold for the coming months. According to the CME Group’s FedWatch tool, Fed funds futures continue to price in about a 95% probability that the US central bank will keep rates unchanged at its January 27–28 meeting. Fed funds futures have pushed expectations for the next rate cut back to June, reflecting stronger labor market conditions and policymakers’ concerns over sticky inflation.
Initial Jobless Claims unexpectedly fell to 198K in the week ended January 10, below market expectations of 215K and down from the prior week’s revised 207K. The data confirmed that layoffs remain limited and that the labor market is holding up despite an extended period of high borrowing costs.
