Silver/USD breaks through the $69.00 level: Geopolitical tensions intensify safe-haven flows and create new opportunities in the USD trend chart

2025-12-25 00:56:55

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On Monday during Asian trading hours, silver hit a record high, with XAG/USD reaching a critical level of nearly $69.00, a daily increase of 2.5%. Behind this rapid surge are the escalating geopolitical risks between Israel and Iran.

Geopolitical Risks Drive Safe-Haven Asset Demand

According to NBC News, Israeli decision-makers are becoming increasingly cautious about Iran’s military movements. Intelligence indicates that Iran is not only accelerating its ballistic missile production plans but also rebuilding nuclear facilities that were destroyed earlier this year by Israeli airstrikes. To counter this strategic threat, Israeli officials are preparing to submit a new assessment of military strike options to U.S. President Donald Trump.

This escalation in geopolitical tensions directly fuels investor demand for traditional safe-haven assets like silver. As a precious metal, silver often performs remarkably well during times of increased global uncertainty, and corresponding capital flows can be observed in the USD trend chart.

Federal Reserve Policy Expectations Support Silver

On the monetary policy front, market expectations for the Federal Reserve’s January decision remain cautious. Although November US inflation data showed signs of weakness, this has not altered the market’s view that the Fed will hold steady.

According to the latest November CPI data, overall inflation has fallen to an annual rate of 2.7%, down from 3% in October, but the decline is less than the 3.1% expected by economists. Notably, core CPI, which excludes food and energy volatility, decreased from 3% in the previous month to 2.6%, indicating some easing of price pressures.

Nevertheless, the likelihood of the Fed cutting interest rates at the January policy meeting remains slim. This suggests the dollar may remain relatively stable or even strengthen, which is often favorable for the performance of USD-priced silver.

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