Silver Climbs as Middle East Conflict Escalates

Silver advanced nearly 2% to above $95 per ounce on Monday, reaching an over one-month high as safe-haven demand strengthened after joint US and Israeli strikes on Iran sharply escalated the war in the Middle East. The conflict resulted in the death of Iran’s Supreme Leader, Ayatollah Ali Khamenei, and triggered the effective closure of the Strait of Hormuz, a key passage for roughly one-fifth of global oil shipments and substantial natural gas flows. Iran also launched attacks on US assets across neighboring states, including the United Arab Emirates, Bahrain, Kuwait, Qatar, Saudi Arabia, Jordan, Iraq and Syria. The large-scale US-led offensive was carried out over the weekend after Iran rejected Washington's demands to curb its nuclear program.

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.