Forex News
- GBP/USD rises as weak US labor data caps the Dollar’s rebound.
- Iran threats sour sentiment, but Sterling holds gains above 1.3200.
- UK growth stays sluggish as stagflation risks cloud the outlook.
The Pound Sterling registers modest gains after Iran's IRGC threatened to attack US companies as of April 1, turning market mood sour, while the US Dollar trimmed some of its earlier losses. Nevertheless, the move was short-lived as the GBP/USD traded at 1.3190, up 0.04%.
Sterling gains as soft JOLTS counters Iran threat and Dollar
Iran's state media reported that Iran's Islamic Revolutionary Guard Corps (IRGC) would target US companies within the region in retaliation for attacks on Iran. Some of the names targeted are Microsoft, Apple, Google, Intel and Boeing among the 18 companies warned by the IRGC.
In the headline, the Greenback cut some of its earlier losses as revealed by the US Dollar Index (DXY). However, the DXY, which measures the buck's performance against six currencies, edges towards 100.00, down 0.37%.
US jobs data revealed weakness in the labour market. The Job Openings and Labor Turnover Summary (JOLTS) revealed that vacancies fell from 7.2 million in January to 6.9 million in February. The data revealed that hiring deteriorated, falling 3.1 percentage points to 3.4% from the previous month, the US Department of Labor said.
In the UK, the economy expanded by a mediocre 0.1% in Q4 2025, according to the Office for National Statistics (ONS), in line with economists' estimates. Compared with a year earlier, GDP in the last quarter grew 1%, unchanged. It should be said that the OECD downward revised Britain's economy from 1.2% to 0.7% last week.
Hence, the UK economy faces a stagflationary scenario prompted by a double whammy: the Middle East conflict underpinning energy prices and the UK economy at the brisk of decelerating further. Despite this, money markets seem to be getting ahead of themselves, pricing in 59 basis points of BoE tightening. Conversely, the Fed most likely stand pat, according to the CME FedWatch Tool.
Given the backdrop, the GBP/USD could rise further in the near term, with the first key resistance seen at the March 30 high at 1.3282. If broken, expect a move towards 1.3300 and beyond.
GBP/USD Price Forecast: Technical Outlook
In the daily chart, GBP/USD trades at 1.3192. The near-term bias is mildly bearish as spot holds well below the clustered 50–200-day simple moving averages around 1.35, keeping the broader down phase from the 1.38 area intact. Price is pinned between an ascending support trend line from 1.3035 and a descending resistance line from 1.3869, with the latest candles pressing the lower half of this contracting structure. The Fed Sentiment Index has pushed to fresh highs above 122, underscoring a stronger dollar backdrop that reinforces downside pressure while the pair remains capped beneath the descending trend line.
Immediate resistance emerges near 1.3330, where recent highs align beneath the descending trend line and the lower band of the moving-average cluster, with a break exposing 1.3400 and then the 1.3500 region as a stronger barrier. On the downside, initial support is at 1.3180–1.3200, just above the rising trend line drawn from 1.3035, and a clear close below this area would open 1.3100, followed by the 1.3035 swing low. As long as spot trades below 1.3330 and beneath the flattening medium-term averages, rallies are likely to be sold into, keeping the bias tilted to the downside toward the lower supports.
(The technical analysis of this story was written with the help of an AI tool.)
Pound Sterling Price This Month
The table below shows the percentage change of British Pound (GBP) against listed major currencies this month. British Pound was the strongest against the New Zealand Dollar.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | 2.41% | 2.27% | 1.88% | 1.97% | 3.67% | 4.80% | 3.71% | |
| EUR | -2.41% | -0.14% | -0.55% | -0.43% | 1.23% | 2.33% | 1.24% | |
| GBP | -2.27% | 0.14% | -0.38% | -0.29% | 1.37% | 2.47% | 1.40% | |
| JPY | -1.88% | 0.55% | 0.38% | 0.10% | 1.76% | 2.86% | 1.79% | |
| CAD | -1.97% | 0.43% | 0.29% | -0.10% | 1.66% | 2.76% | 1.68% | |
| AUD | -3.67% | -1.23% | -1.37% | -1.76% | -1.66% | 1.09% | 0.01% | |
| NZD | -4.80% | -2.33% | -2.47% | -2.86% | -2.76% | -1.09% | -1.04% | |
| CHF | -3.71% | -1.24% | -1.40% | -1.79% | -1.68% | -0.01% | 1.04% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the British Pound from the left column and move along the horizontal line to the US Dollar, the percentage change displayed in the box will represent GBP (base)/USD (quote).
- NZD/USD trades around 0.5710 on Tuesday, down 0.15% on the day.
- The US Dollar remains supported near recent highs despite a slight pullback in the DXY.
- Investors remain cautious as geopolitical tensions and shifting interest-rate expectations influence sentiment.
NZD/USD trades around 0.5710 on Tuesday at the time of writing, down 0.15% on the day as the US Dollar (USD) stabilizes and market caution persists. The US Dollar Index (DXY), which measures the Greenback’s performance against a basket of six major currencies, stands near 100.20 after touching a ten-month high of 100.64 earlier in the day.
Markets remain focused on geopolitical developments in the Middle East. According to the Wall Street Journal, US President Donald Trump is reportedly willing to end the military campaign against Iran even if the Strait of Hormuz remains partially closed, briefly raising hopes for de-escalation. However, Washington still aims to weaken Iran’s naval and missile capabilities while maintaining diplomatic pressure. Meanwhile, Iran warned it could target US companies operating in the region starting April 1. In addition, an Iranian parliamentary committee has approved a plan to impose tolls on ships passing through the Strait of Hormuz, keeping uncertainty elevated in energy markets.
On the macroeconomic front, US data provided moderate support to the Greenback. The Conference Board’s Consumer Confidence Index rose to 91.8 in March from a revised 91 in February. The improvement mainly reflects a better assessment of current economic conditions, according to the institution’s Chief Economist Dana M. Peterson, although the indicator remains on a broader downward trend since 2021.
At the same time, expectations of further monetary tightening appear to be fading. Investors are increasingly concerned that rising Oil prices could slow global growth while keeping inflation elevated. According to the CME FedWatch tool, markets now expect the Federal Reserve (Fed) to keep interest rates unchanged within the 3.50%-3.75% range through the year.
In New Zealand, TD Securities notes that markets now price roughly three rate hikes this year for the Reserve Bank of New Zealand (RBNZ), but believes expectations may be excessive.
US Dollar Price Today
The table below shows the percentage change of US Dollar (USD) against listed major currencies today. US Dollar was the strongest against the Swiss Franc.
| USD | EUR | GBP | JPY | CAD | AUD | NZD | CHF | |
|---|---|---|---|---|---|---|---|---|
| USD | -0.47% | -0.08% | -0.46% | 0.21% | -0.12% | 0.15% | 0.33% | |
| EUR | 0.47% | 0.41% | 0.05% | 0.72% | 0.38% | 0.66% | 0.84% | |
| GBP | 0.08% | -0.41% | -0.31% | 0.33% | -0.01% | 0.25% | 0.45% | |
| JPY | 0.46% | -0.05% | 0.31% | 0.66% | 0.33% | 0.60% | 0.80% | |
| CAD | -0.21% | -0.72% | -0.33% | -0.66% | -0.33% | -0.06% | 0.13% | |
| AUD | 0.12% | -0.38% | 0.01% | -0.33% | 0.33% | 0.28% | 0.46% | |
| NZD | -0.15% | -0.66% | -0.25% | -0.60% | 0.06% | -0.28% | 0.18% | |
| CHF | -0.33% | -0.84% | -0.45% | -0.80% | -0.13% | -0.46% | -0.18% |
The heat map shows percentage changes of major currencies against each other. The base currency is picked from the left column, while the quote currency is picked from the top row. For example, if you pick the US Dollar from the left column and move along the horizontal line to the Japanese Yen, the percentage change displayed in the box will represent USD (base)/JPY (quote).
- Japanese officials warn against excessive FX moves, boosting the Yen amid rising intervention threats.
- BoJ Governor Kazuo Ueda signals rate hikes remain possible as FX weakness fuels inflation.
- US Dollar eases slightly despite geopolitical tensions as markets await US employment data.
The USD/JPY fell to near the 159.00 level, extending its slide below the 160.00 barrier on Tuesday as the Japanese Yen (JPY) finds support from intervention threats and hawkish signals from policymakers, while the US Dollar (USD) eases slightly despite the ongoing war with Iran.
From the United States (US) side, recent rhetoric from President Donald Trump continues to shape sentiment. While earlier comments helped boost the USD by reinforcing confidence in the US economy and downplaying the economic fallout from rising Oil prices, markets are now reassessing risks amid evolving geopolitical headlines.
The New York Post publishes President Trump's comments:
US has more work to do in Iran war.
US doesn't have to be in Iran much longer.
Hormuz Strait will 'automatically open.'
Other nations can reopen Hormuz Strait.”
Meanwhile, the JPY is gaining traction as authorities ramp up verbal intervention. Japan’s Finance Minister, Satsuki Katayama, described recent currency moves as “speculative” and reiterated readiness to act against excessive volatility, signaling that officials are closely monitoring FX developments.
Additional support for the Yen comes from growing expectations that the Bank of Japan (BoJ) may tighten policy further. Governor Kazuo Ueda emphasized that exchange rate movements are having a meaningful impact on inflation and that persistent Yen weakness could justify rate hikes.
Short-term technical analysis:
In the 4-hour chart, USD/JPY trades at 159.03. The near-term bias turns mildly bearish after the pair slipped back toward the lower end of its recent range and now flirts with the 20-period Simple Moving Average (SMA) at 159.74 while holding only marginally above the rising 100-period SMA at 159.05. The loss of upside momentum is reflected in the Relative Strength Index (RSI), which has retreated from the mid-60s to around 40, signaling fading buying pressure and leaving the pair vulnerable to a deeper pullback while below the short-term average cluster.
Immediate support emerges at 159.02, just above the 100-period SMA, with a clear break opening the way toward 158.90 as the next downside level. Below that zone, sellers would gain traction and expose a more pronounced correction. On the topside, initial resistance stands at 159.42, followed by 159.56, where prior reaction highs converge with the short-term average band. A recovery through 159.56 would ease the current downside bias and re-establish the broader uptrend toward the 160.00 area.
(The technical analysis of this story was written with the help of an AI tool.)
- US CB Consumer Confidence Index improves in March.
- The US Dollar Index loses momentum, hovers around the 100.00 hurdle.
US consumer sentiment picked up marginal pace in March, as the Conference Board’s Consumer Confidence Index ticked a tad higher to 91.8 from February’s 91.0 (revised from 91.2).
“Consumer confidence ticked up again in March, as a modest improvement in consumers’ views of current conditions outweighed a slight downshift in expectations for the future”… “Three of five components of the Index firmed in March, and overall confidence improved modestly for a second month. Nonetheless, the Index has been on a general downward trend since 2021,”said Dana M Peterson, Chief Economist at The Conference Board.
Market reaction
The US Dollar (USD) reverses part of its recent multi-day rebound, motivating the US Dollar Index (DXY) to abandon the area of recent peaks near 100.60 and refocus on a potential test of the 100.00 support.
GDP FAQs
A country’s Gross Domestic Product (GDP) measures the rate of growth of its economy over a given period of time, usually a quarter. The most reliable figures are those that compare GDP to the previous quarter e.g Q2 of 2023 vs Q1 of 2023, or to the same period in the previous year, e.g Q2 of 2023 vs Q2 of 2022. Annualized quarterly GDP figures extrapolate the growth rate of the quarter as if it were constant for the rest of the year. These can be misleading, however, if temporary shocks impact growth in one quarter but are unlikely to last all year – such as happened in the first quarter of 2020 at the outbreak of the covid pandemic, when growth plummeted.
A higher GDP result is generally positive for a nation’s currency as it reflects a growing economy, which is more likely to produce goods and services that can be exported, as well as attracting higher foreign investment. By the same token, when GDP falls it is usually negative for the currency. When an economy grows people tend to spend more, which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation with the side effect of attracting more capital inflows from global investors, thus helping the local currency appreciate.
When an economy grows and GDP is rising, people tend to spend more which leads to inflation. The country’s central bank then has to put up interest rates to combat the inflation. Higher interest rates are negative for Gold because they increase the opportunity-cost of holding Gold versus placing the money in a cash deposit account. Therefore, a higher GDP growth rate is usually a bearish factor for Gold price.
- Gold set for worst monthly drop since October 2008 amid Middle East turmoil.
- Softer US Dollar offers support, though a higher-for-longer rate outlook caps XAU/USD gains.
- Technically, XAU/USD remains mildly bullish within an ascending triangle on the 4-hour chart.
Gold (XAU/USD) trades with an upside bias on Tuesday, on hopes of de-escalation in the Middle East conflict. However, price action remains trapped in a one-week-old trading range, reflecting indecision among traders amid mixed signals on geopolitical developments and shifting expectations around the Federal Reserve (Fed) monetary policy path.
At the time of writing, XAU/USD is trading around $4,618, up nearly 2.30% on the day. The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading near 100.12, easing after touching ten-month highs of 100.64.
Middle East headlines keep markets cautious
The Wall Street Journal reported on Tuesday that Donald Trump has decided he is willing to end the US military campaign against Iran even if the Strait of Hormuz remains largely closed, raising hopes that the conflict could end soon.
However, the report also noted that he has decided the US should still achieve its main goals of degrading Iran’s naval and missile capabilities and continue diplomatic pressure to restore trade flows, keeping tensions elevated.
Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that it could target US companies in the region starting April 1 in retaliation for recent attacks.
Meanwhile, a parliamentary committee in Iran has approved plans to impose tolls on shipping through the Strait of Hormuz, according to the Fars News Agency, citing the Islamic Revolutionary Guard Corps.
Macro headwinds weigh on Gold
As the war continues to escalate and Oil prices remain elevated, fueling inflation worries, Gold is not behaving like a typical safe-haven or inflation hedge. Instead, price action is being driven by higher-for-longer interest rate expectations globally and sustained demand for the USD, with the metal now on track to post its worst monthly decline since October 2008.
At the same time, markets are beginning to push back earlier expectations of rate hikes, as traders grow concerned that rising Oil prices could slow economic growth even as they keep inflation high, creating a policy dilemma for major economies.
According to the CME FedWatch Tool, markets expect the Fed to keep interest rates unchanged at 3.50%-3.75% through 2026. A higher interest rate environment reduces the appeal of non-yielding assets such as Gold.
In the near term, Gold is likely to remain range-bound with a slight downside bias unless a clear end to the US-Iran conflict leads to a meaningful decline in Oil prices and a shift in interest rate expectations.
Technical analysis: XAU/USD eyes breakout above $4,600
From a technical perspective, XAU/USD appears mildly bullish in the near term. On the 4-hour chart, an ascending triangle pattern is forming, suggesting building upside pressure. Spot now trades above the 50-period Simple Moving Average (SMA) at $4,494, which is acting as immediate support.
The Relative Strength Index (RSI) holds above the 50 mark, signaling building upside momentum, while the Moving Average Convergence Divergence (MACD) remains in positive territory, with the MACD line above its signal line and a modestly positive histogram suggesting buyers retain control in the current move.
On the upside, a clear break above the upper boundary of the triangle, near the $4,600 zone, could open the door for a move toward the 100-period SMA at $4,773.
On the downside, a break below the 50-period SMA at $4,494 could find support in the $4,300-$4,400 zone, followed by the March swing low near $4,100.
Gold FAQs
Gold has played a key role in human’s history as it has been widely used as a store of value and medium of exchange. Currently, apart from its shine and usage for jewelry, the precious metal is widely seen as a safe-haven asset, meaning that it is considered a good investment during turbulent times. Gold is also widely seen as a hedge against inflation and against depreciating currencies as it doesn’t rely on any specific issuer or government.
Central banks are the biggest Gold holders. In their aim to support their currencies in turbulent times, central banks tend to diversify their reserves and buy Gold to improve the perceived strength of the economy and the currency. High Gold reserves can be a source of trust for a country’s solvency. Central banks added 1,136 tonnes of Gold worth around $70 billion to their reserves in 2022, according to data from the World Gold Council. This is the highest yearly purchase since records began. Central banks from emerging economies such as China, India and Turkey are quickly increasing their Gold reserves.
Gold has an inverse correlation with the US Dollar and US Treasuries, which are both major reserve and safe-haven assets. When the Dollar depreciates, Gold tends to rise, enabling investors and central banks to diversify their assets in turbulent times. Gold is also inversely correlated with risk assets. A rally in the stock market tends to weaken Gold price, while sell-offs in riskier markets tend to favor the precious metal.
The price can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can quickly make Gold price escalate due to its safe-haven status. As a yield-less asset, Gold tends to rise with lower interest rates, while higher cost of money usually weighs down on the yellow metal. Still, most moves depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAU/USD). A strong Dollar tends to keep the price of Gold controlled, whereas a weaker Dollar is likely to push Gold prices up.
- USD/CAD rises to fresh three-month highs despite a softer US Dollar.
- Canada's GDP signals a soft start to the year, with a modest rebound expected in February.
- US Dollar eases from multi-month highs as traders reassess risk sentiment.
USD/CAD edges higher on Tuesday, with the Canadian Dollar (CAD) extending its decline against the US Dollar (USD) for a seventh consecutive day, even as the Greenback eases. At the time of writing, the pair is trading around 1.3960, hovering near its highest level since December 2025.
The US Dollar Index (DXY), which tracks the Greenback's value against a basket of six major currencies, is trading near 100.17, pulling back after touching fresh ten-month highs of 100.64 earlier in the day.
The pullback in the US Dollar appears largely technical, while some easing in geopolitical risk sentiment is also weighing on demand after The Wall Street Journal reported that Donald Trump is willing to end the US military campaign against Iran even if the Strait of Hormuz remains largely closed.
However, geopolitical risks remain elevated. Iran’s Islamic Revolutionary Guard Corps (IRGC) warned that it could target US companies in the region starting April 1 in retaliation for recent attacks.
The Loonie has remained under sustained pressure since the US-Israel war with Iran erupted, pushing energy prices sharply higher. While Canada is a net Oil exporter, persistent downside pressure on the CAD reflects growing concerns that elevated energy costs could weigh on domestic demand and slow broader economic growth.
Adding to the cautious tone, Canada’s January Gross Domestic Product (GDP) rose by 0.1% MoM, slightly above expectations for a flat reading, though it marked a slowdown from the previous 0.2% expansion, pointing to soft underlying economic momentum at the start of the year.
However, preliminary estimates suggest that real GDP rose by 0.2% in February, indicating a modest pickup in activity and keeping growth broadly in line with the Bank of Canada’s 1.8% projection outlined in its January Monetary Policy Report.
Meanwhile, traders are increasingly pricing in at least two Bank of Canada (BoC) rate hikes by year-end amid oil-driven inflation pressures. However, persistent labour market headwinds and contained underlying inflation suggest the Bank could remain patient, with rate hikes likely only if Oil prices stay elevated for longer.
In the United States, economic data released on Tuesday showed that JOLTS Job Openings fell to 6.882 million in February from 7.24 million in January, slightly below expectations of 6.92 million.
US Conference Board Consumer Confidence rose to 91.8 in March, beating forecasts of 87.9 and improving from 91 in February.
(This story was corrected on March 31 at 15:24 GMT to say that the US Conference Board Consumer Confidence in February was 91, not 91.2.)
Canadian Dollar FAQs
The key factors driving the Canadian Dollar (CAD) are the level of interest rates set by the Bank of Canada (BoC), the price of Oil, Canada’s largest export, the health of its economy, inflation and the Trade Balance, which is the difference between the value of Canada’s exports versus its imports. Other factors include market sentiment – whether investors are taking on more risky assets (risk-on) or seeking safe-havens (risk-off) – with risk-on being CAD-positive. As its largest trading partner, the health of the US economy is also a key factor influencing the Canadian Dollar.
The Bank of Canada (BoC) has a significant influence on the Canadian Dollar by setting the level of interest rates that banks can lend to one another. This influences the level of interest rates for everyone. The main goal of the BoC is to maintain inflation at 1-3% by adjusting interest rates up or down. Relatively higher interest rates tend to be positive for the CAD. The Bank of Canada can also use quantitative easing and tightening to influence credit conditions, with the former CAD-negative and the latter CAD-positive.
The price of Oil is a key factor impacting the value of the Canadian Dollar. Petroleum is Canada’s biggest export, so Oil price tends to have an immediate impact on the CAD value. Generally, if Oil price rises CAD also goes up, as aggregate demand for the currency increases. The opposite is the case if the price of Oil falls. Higher Oil prices also tend to result in a greater likelihood of a positive Trade Balance, which is also supportive of the CAD.
While inflation had always traditionally been thought of as a negative factor for a currency since it lowers the value of money, the opposite has actually been the case in modern times with the relaxation of cross-border capital controls. Higher inflation tends to lead central banks to put up interest rates which attracts more capital inflows from global investors seeking a lucrative place to keep their money. This increases demand for the local currency, which in Canada’s case is the Canadian Dollar.
Macroeconomic data releases gauge the health of the economy and can have an impact on the Canadian Dollar. Indicators such as GDP, Manufacturing and Services PMIs, employment, and consumer sentiment surveys can all influence the direction of the CAD. A strong economy is good for the Canadian Dollar. Not only does it attract more foreign investment but it may encourage the Bank of Canada to put up interest rates, leading to a stronger currency. If economic data is weak, however, the CAD is likely to fall.
TD Securities analysts note that USD/CAD has been resilient despite stronger Canadian GDP data, as month-end and quarter-end Dollar demand offsets other forces. The pair has broken above its mid-January highs and they now highlights 1.40 as the next key level.
Pair eyes next key resistance zone
"The near-term growth outlook looks a touch stronger after the 0.1% m/m increase for industry-level GDP in January, with GDP printing above the market consensus for a flat print and TD's forecast for -0.1% m/m. Details were mostly upbeat, with no material headwinds outside the outsized pullbacks in manufacturing and wholesale trade, which were already foreshadowed in the monthly reports from Statistics Canada. "
"The upside surprise on January without any sign of giveback in February has introduced upside risk to our prior forecast for Q1 GDP (+0.9% saar), but it's still not enough to validate markets that remain priced for nearly 50bps of tightening by December."
"Although a robust GDP report was buoyed by oil and gas even before the conflict began, USD/CAD has stayed stable as month- and quarter-end USD buying counterbalances other pressures. After surpassing its mid-January highs, USD/CAD continues to rise, with 1.40 emerging as the next important target. "
"The Bank was already working with a 1.8% projection for Q1 GDP, so the upside surprise in today's report should move the market a little closer to the Bank's forecast, rather than introducing upside risks to the BoC's forecast. Labour market headwinds and softer core inflation momentum give the Bank more incentive to stay on the sidelines through 2026, and we continue to look for the next rate hike in 2027Q1."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
Iran's state media reported on Tuesday that Iran's Islamic Revolutionary Guard Corps (IRGC) announced that they will target United States (US) companies, including Google, Apple, Intel, Boeing, IBM and Tesla, in the region as of April 1 in retaliation for attacks on Iran.
"These companies should expect the destruction of their respective units in exchange for each terror act in Iran, starting from 8 PM Tehran time on Wednesday, April 1st," the IRGC statement said, as reported by Reuters.
Market reaction
This headline doesn't seem to be having a significant impact on risk mood. At the time of press, the Nasdaq Composite Index was up 1.15% on the day, while the S&P 500 was gaining 1%.
Societe Generale’s Dev Ashish expects Brazil’s economy to expand below trend in 2026 as tighter policy and a weaker external backdrop weigh on activity. Inflation is seen pressured by higher Oil prices, though soft demand offers some cushion. The Central Bank of Brazil (BCB) is projected to ease cautiously, with larger rate cuts postponed until Oil pressures recede, while elections cloud fiscal consolidation prospects and medium‑term direction.
Sub‑trend growth with cautious BCB easing
"Economy to grow below trend in 2026 as tighter policy and weakening external outlook weigh on activity."
"Higher oil price is pushing expectations higher, though weak demand cushions somewhat."
"BCB to ease slowly; meaningful cuts delayed until oil pressures fade."
"Oil helps but elections add uncertainty to consolidation and medium‑term fiscal direction."
"Balance of risks spans global demand, oil‑driven inflation, and post‑election fiscal shifts."
(This article was created with the help of an Artificial Intelligence tool and reviewed by an editor.)
- Silver price rallies sharply on Tuesday, supported by optimism over a possible de-escalation between the United States and Iran.
- Investors expect that easing geopolitical tensions could push energy prices lower and moderate global inflation pressures.
- Softer inflation expectations could encourage central banks to adopt a less restrictive monetary stance.
Silver (XAG/USD) surges on Tuesday and trades around $73.70 at the time of writing, up 5.14% on the day. The precious metal is benefiting from a weaker US Dollar (USD) and renewed optimism in markets after reports indicated that US President Donald Trump is willing to end the military campaign against Iran even if the Strait of Hormuz remains largely closed.
According to a Wall Street Journal report, Donald Trump told aides he is open to pursuing a diplomatic resolution with Iran. The report added that US administration officials believe that forcibly reopening the Strait of Hormuz would require extending the military operation well beyond the initially estimated four-to-six-week timeline.
In theory, easing geopolitical tensions usually reduces demand for safe-haven assets such as Silver. However, the white metal is outperforming as markets expect that a Middle East truce could lead to lower Oil prices, helping to ease global inflation expectations.
In recent weeks, the surge in energy prices caused by supply disruptions linked to Middle East tensions has fueled concerns about persistently high inflation. Such a scenario generally encourages central banks to keep monetary conditions restrictive, which tends to reduce the appeal of non-yielding assets such as Silver.
If regional tensions continue to ease and Oil prices decline, investors could start revising down their expectations for restrictive monetary policies. This outlook is currently supporting demand for Silver, which benefits both from its safe-haven status and its sensitivity to inflation and interest rate expectations.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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