Silver Price Rebounds Nearly 6% in Deep V-Shape After Briefly Dropping Below $80 Mark, Whipsawing Both Longs and Shorts Within the Day

TradingKey - During the Asian trading session, silver was hit by market sell-offs due to a stronger US dollar and shifting risk appetite, plunging 5.6% after the open before staging a sharp rebound to gain over 0.4%, with an intraday swing exceeding 6%. Gold, another precious metal, also faced selling pressure at the open, at one point dropping nearly 3%.

Precious metals saw profit-taking following a strong rally, as traders moved to hold cash amid the market turmoil.

Furthermore, supply disruptions in the Strait of Hormuz have heightened inflation concerns and further complicated the interest rate outlook.

Data from the CME shows that the market currently sees a nearly 95% probability that the U.S. will keep interest rates unchanged at its March meeting. This, in turn, provides some support for the dollar. A stronger dollar typically weighs on precious metals.

Although silver and gold were once viewed by the market as safe-haven assets, their excessive recent gains have led the market to define them more as risk assets. Unlike gold, silver is not solely a safe-haven asset, as it also has industrial applications.

Against the backdrop of uncertainty in the Middle East and surging crude oil prices, industrial activity appears to be slowing, leading to waning expectations for silver demand.