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Home Silver Price Silver Prices Surge Near $23 on Escalating Geopolitical Tensions

Silver Prices Surge Near $23 on Escalating Geopolitical Tensions

by anna

Silver prices (XAG/USD) have experienced a significant jump, nearing the $23 mark, as deepening geopolitical tensions enhance the appeal for bullion. The white metal is witnessing notable buying interest, driven by increased volatility amid the intensifying crisis in the Middle East.

Geopolitical tensions escalated following an aerial drone attack that resulted in the death of three US service members stationed in northeastern Jordan. The ongoing attacks on commercial shipments through the Red Sea have further heightened concerns, creating a volatile environment that favors safe-haven assets like silver.

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White House National Economic Council director Lael Brainard, however, stated last week that Iran-backed Houthi attacks on ships in the Red Sea seem to have a limited impact on their supply chain compared to other economies.

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As the week unfolds, market participants are closely monitoring the first interest rate decision of 2024 by the Federal Reserve (Fed), scheduled for announcement on Wednesday. The Fed is widely expected to maintain interest rates within the range of 5.25-5.50%, continuing the current policy for the fourth consecutive time.

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Investors are particularly focused on whether Fed policymakers will adjust their stance on “restrictive interest rates,” given the moderate increase in the core Personal Consumption Expenditure (PCE) price index data for December, which was released last week. The outcome of the Fed’s decision and any shift in tone could influence the direction of silver prices in the coming days.

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