Silver Prices Rise Amid Rising Safe-Haven Demand
Silver (XAG/USD) prices rose further to near $29.80 during the European session on Friday (3/1). The white metal strengthened as demand for safe-haven assets increased due to renewed geopolitical tensions. According to a report from Axios, US President Joe Biden discussed the possibility of an attack on Iran’s nuclear facilities with his national security team, with President-elect Donald Trump weeks left to take office.
Axios reported that White House National Security Advisor Jake Sullivan presented President Biden with a number of options for a possible US attack on Iran’s nuclear sites. Historically, demand for safe-haven assets, such as Silver, increases with increasing geopolitical uncertainty.
In addition, the prospect of high inflation under the Trump administration, as he is expected to tighten immigration controls, raise import tariffs, and lower taxes, has also strengthened safe-haven demand. Silver tends to face high demand as investors use it as a hedge against inflation.
Meanwhile, the US Dollar (USD) weakened on Friday after a sharp rally on Thursday, with investors focusing on the US ISM Manufacturing PMI data for December, due to be published at 15:00 GMT. The PMI is expected to remain unchanged at 48.4, indicating that factory activity continued to contract.
The 10-year US Treasury yield fell to near 4.55% despite the Federal Reserve (Fed) all but certain to halt its current policy easing in its policy announcement on January 29.
Source: FXStreet
