Silver Climbs Close to 3-Year High Amid Tensions

XAGUSD Analysis – Silver prices have approached a three-year high, hovering around $28.5 per ounce, close to the peak of $28.9 on April 15th. This surge comes as geopolitical tensions in the Middle East escalate, with Israel’s vow of retaliation against Iran intensifying fears of a broader regional conflict. This uncertainty has bolstered silver’s status as a safe-haven asset, attracting investors looking for stability in volatile times.

Silver Climbs Close to 3-Year High

Silver Demand Surges in Tech and Solar Sectors

Moreover, the demand for silver continues to rise, mainly due to its expanding industrial applications. It is increasingly used in electronics and solar power sectors, where its properties are invaluable. This heightened demand has outstripped supply, leading to a noticeable drop in above-ground inventories recorded by the London Bullion Market Association (LBMA) and various exchanges.

However, the rising silver prices are tempered by economic developments in the United States. Recent robust U.S. retail sales data and Federal Reserve Chair Jerome Powell’s comments suggest that interest rates may remain high for an extended period. Higher interest rates strengthen the U.S. dollar, making dollar-priced metals like silver more costly for international buyers and dampening consumer purchasing power.

These conflicting forces — geopolitical risks increasing silver’s allure as a safe haven and economic policies potentially slowing its demand — create a complex environment for investors and analysts tracking the precious metal’s market movements.