Silver prices strengthened on Friday (March 6th) following a rebound in the precious metals complex, but were still headed for a sharp weekly decline as investors remained skewed toward the dollar amid escalating Middle East conflicts and inflation concerns. XAG/USD last traded around US$84.35 per ounce, up about 2.5% from the previous close.

Despite today's gains, the week's performance remains negative. Five-day performance data shows silver is down about 10% compared to the end of last week, reflecting volatility driven by conflict headlines, surging energy costs, and a shift in liquidity positioning to the dollar.

From a fundamental perspective, the US-Israel war against Iran, which entered its seventh day, kept geopolitical risk premiums high, while energy disruptions exacerbated inflation concerns. Reuters also noted that precious metals strengthened on Friday due to a safe-haven boost, with silver rising about 2.4% on the day.

On the policy front, a surge

On the policy front, a surge in energy and relatively solid US data prompted the market to delay expectations of a Fed rate cut, which is generally a drag on precious metals when the dollar and yields strengthen. Market focus now shifts to the US Nonfarm Payrolls (NFP) release to test whether the "rates higher for longer" narrative is gaining strength or starting to subside.