Silver Slump: Commodities Feel the Sting of Eased Geopolitical Tensions

Commodities markets experienced a significant downturn, led by silver, as geopolitical tensions between the U.S. and Iran eased. A stronger dollar added pressure, making U.S.-priced commodities expensive for other currency users. Despite this, soybeans rose due to potential Chinese buying interest.

On Thursday, global commodities prices took a sharp downturn, spearheaded by a 15% fall in silver, as part of a widespread sell-off following eased geopolitical tensions between the U.S. and Iran. This decline was further fueled by a stronger dollar, rendering U.S.-priced commodities more costly for foreign buyers.

The market reversal came amidst news of planned discussions between U.S. and Iranian leaders and a constructive phone call between the leaders of the U.S. and China, spurring a shift away from hard assets. Tony Sycamore, an analyst at broker IG, pointed out that the volatility in precious metals and commodities is partly due to these tensions.

Copper, although distancing from record highs, showed resilience due to China's intent to expand its strategic reserves. Conversely, soybeans broke the downward trend by reaching a two-month high, buoyed by U.S. President Trump's remarks on China's interest in purchasing U.S. supplies.

(With inputs from agencies.)