Price surge, approaching an all-time high due to Middle East tensions, surpassing $69.00 - including scenarios of January interest rate hikes

Geopolitical Risks Ignite Market Movements

XAG/USD surged to nearly $69.00 during Monday’s Asian session, hitting a record high. The 2.5% increase in silver prices was primarily driven by investors’ risk aversion. As military tensions between Israel and Iran escalated again, the market immediately shifted funds into safe-haven assets.

According to NBC News, Israeli officials consider Iran’s recovery of nuclear facilities and increased ballistic missile activity to be serious threats. As Iran’s reorganization activities following initial military strikes are confirmed, discussions are underway with the Trump administration regarding additional retaliatory measures. If these tensions persist, demand for precious metals, including silver, is likely to remain strong.

Monetary Policy Remains a Variable

The situation from a monetary policy perspective is complex. The prevailing market view is that the Fed is unlikely to cut interest rates at the January policy meeting. Despite November US CPI slowing to 2.7% year-over-year and core CPI falling short of expectations at 2.6%, investors remain cautious.

The signals of CPI slowdown are already priced in, but there is a consensus that this is insufficient to prompt a shift in the Fed’s policy stance. As the January rate decision approaches, market attention remains sharply focused on economic data and inflation trends.

Technical Trends: Between Peak Targets and Corrections

Silver prices are attracting attention as they reach record highs even on a per-kilogram basis. The key question is whether prices can continue to rise beyond $69.00 in the short term or if they will undergo a temporary correction at the high point.

The future direction of silver prices is expected to react swiftly to Middle East news flows and the Fed’s policy signals. If geopolitical instability persists, safe-haven asset preference is likely to remain strong.