[MARKET ANALYSIS] Gold and silver face pressure from a stronger USD and profit taking

• Precious metals are trading slightly lower. Silver faces a steeper drop thus far, down 4.6%, whilst spot gold is down 0.4%. XAG and XAU trade within the narrow ranges of USD 5,284.62-5,292/oz and USD 84.84-85.13/oz, respectively. Continuous dollar strength continues to hamper gains in the precious metals space despite weaker global risk sentiment amid geopolitical tension between the US and Iran, which increases haven demand for precious metals. Some analysts also suggest that profit-taking has been the key driver behind the slight pressure on the yellow metal. That being said, BMI forecasts that gold should rise above USD 5,600/oz this week with further upside to USD 5,850-6,500/oz if the conflict lasts 2-3 weeks.
• Base metals are also lower, hampered by global risk sentiment amid geopolitical tension between the US and Iran. 3M LME copper trades within the lower range of USD 12.798-13.281k/t.

The decline in gold and silver prices is largely attributed to a stronger USD and profit-taking, despite rising haven demand from geopolitical tensions. Silver's sharper drop signals higher sensitivity to market conditions, while forecasts suggest potential upside in gold if conflict escalates. Traders should keep an eye on dollar strength and global risk sentiment as key drivers for precious metal prices going forward.