Silver Prices Positioned for Strong Gains

Silver prices are poised to surge when trading resumes Sunday night, driven by renewed safe-haven demand after US and Israel's attacks on Iran sharply escalated tensions in the Middle East. In retaliation, Iran moved to restrict traffic through the strategic Strait of Hormuz, a vital route for about one-fifth of the world’s oil and substantial natural gas flows, and launched attacks across neighbouring states, including the United Arab Emirates, Bahrain, Kuwait, Qatar, Saudi Arabia, Jordan, Iraq and Syria. Silver had already been on the rise, trading above $92 per ounce on Friday, and hitting nearly two-month highs as investors rotated into precious metals amid intensifying trade and geopolitical risks.

Silver surged over 4% to trade above $92 per ounce on Friday, hitting nearly two-month highs as investors rotated into precious metals amid intensifying trade and geopolitical risks. The white metal is benefiting from a massive "debasement trade" triggered by the US administration's move to invoke Section 122 for a 10% global tariff, with markets pricing in a potential escalation to 15% following the recent Supreme Court ruling. This protectionist shift has overshadowed a "hot" January core PPI print of 0.8%, which reinforced a resilient Dollar and pushed the first fully priced Fed rate cut to July. Despite these hawkish headwinds, silver's rally is being supercharged by a flight to safety as US 10-year Treasury yields fell below 4% and investors liquidated positions in AI-infrastructure equities. Geopolitical premiums also remained elevated following the US State Department authorizing the departure of non-emergency personnel from its embassy in Israel due to safety risks.

Silver climbed nearly 2% toward $90 per ounce on Friday, poised for a second consecutive weekly gain, supported by US tariff uncertainties and elevated geopolitical risks. Investors weighed policy uncertainty in Washington after the US Supreme Court struck down Donald Trump’s broad reciprocal tariffs last week. The administration then implemented a new 10% global tariff, which could rise to 15% for certain countries, fueling concerns that existing trade deals between the US and its partners might be undermined. Meanwhile, a hawkish shift among Federal Reserve officials could limit gains in precious metals, with robust US economic data supporting expectations for an extended rate hold. On the geopolitical front, the US and Iran agreed to continue nuclear negotiations next week, following progress during Thursday’s talks in Geneva.