Silver Surges, US Tariffs and US–Iran Risks Drive Safe-Haven Demand
Silver prices rose sharply on Wednesday (February 25th), driven by increased demand for safe-haven assets amid trade uncertainty and geopolitical risks.
Silver (XAG/USD) traded around $90.70, up around 3.9% on the day, as investors returned to the precious metal as a hedge against heightened global volatility.
On the trade front, market sentiment remains clouded by US tariff policy. President Donald Trump announced the imposition of a 10% global import tariff on trading partners amid legal uncertainty following a Supreme Court ruling regarding the use of emergency powers. This situation has heightened market concerns about the potential for escalating protectionism, which could depress global economic growth.
Geopolitically, investor attention is focused on the US–Iran nuclear talks scheduled for Thursday in Geneva. Although both sides have expressed a preference for a diplomatic solution, the risk of failed negotiations and the possibility of military escalation in the Middle East keep the geopolitical “risk premium” high—an environment that typically supports the performance of precious metals, including silver.
Meanwhile, monetary policy factors have also strengthened silver's appeal. Investors are reassessing the Fed's interest rate outlook, with some central bank officials emphasizing persistent inflation, necessitating more cautious easing. However, the market is still pricing in the possibility of a rate cut in the coming months, limiting the US dollar's strength.
The combination of a relatively weaker dollar and softer US bond yields is also supporting silver, as the precious metal tends to be more attractive when real yields decline.
Source: newsmaker.id
