Geopolitical tensions revived, silver prices climbed to near $29.80.
US President Biden Discusses Possible Ways to Strike Iran's Nuclear Facilities.
Investors Expect the Federal Reserve to Keep Interest Rates Unchanged at This Month's Policy Meeting.
Silver prices (XAG/USD) rose further to near $29.80 during the European session on Friday. The white metal rose as demand for safe-haven assets improved amid renewed geopolitical tensions. According to a report by Axios, US President Joe Biden discussed the possibility of a strike on Iran's nuclear facilities with his national security team, with only a few weeks left before President-elect Donald Trump takes office.
Axios reports that White House National Security Advisor Jake Sullivan has raised the option of a possible U.S. attack on Iran's nuclear facilities with President Biden. Historically, safe-haven assets such as silver have seen higher demand amid heightened geopolitical uncertainty.
In addition, the prospect of high inflation under Trump's tax administration, where he is expected to tighten immigration controls, raise import tariffs and lower tax rates, has also strengthened demand for tax havens. Silver tends to face high demand as investors use it as a hedge against inflation.
Meanwhile, the U.S. dollar (USD) fell on Friday after a sharp rise on Thursday as investors focused on the U.S. ISM Manufacturing Purchasing Managers' Index data for December, which will be released at 15:00 GMT. The manufacturing PMI is estimated to remain unchanged at 48.4, indicating a steady contraction in factory activity.
The 10-year Treasury yield fell to around 4.55%, even though the Federal Reserve (Fed) will certainly pause the current policy easing spell in its policy announcement on January 29.
Silver prices rebounded to around the 20-day exponential moving average (EMA), trading around $29.85. However, the outlook for the silver metal remains bearish as long as it remains below the upward sloping trendline, which was drawn from the February 29 low of $22.30 on the daily timeframe.
The 14-day relative strength index (RSI) rebounded above 40.00. If it can sustain above this level, the bearish momentum will come to an end.
Looking down, the September low of $27.75 will act as a key support for silver prices. On the upside, the 50-day EMA near $30.90 will act as a barrier.
Silver Daily Chart
