Silver Price Holds Above $38.00 as Safe-Haven Demand Lifts XAG/USD Toward 14-Year High

Silver Price Holds Above $38.00 as Safe-Haven Demand Lifts XAG/USD Toward 14-Year High

The Silver price (XAG/USD) is trading near $38.10 per ounce during early Tuesday’s Asian session, after briefly hitting a 14-year high of $39.13 on Monday. Rising geopolitical tensions and inflation fears have sparked renewed safe-haven demand, giving Silver a fresh push higher despite modest recent pullbacks.

Geopolitical Tensions Drive Safe-Haven Flows

US President Donald Trump renewed geopolitical pressure by threatening “very severe” tariffs on Russia if a peace agreement in Ukraine is not reached within the next 50 days. This includes potential secondary sanctions on countries importing Russian oil.

Adding fuel to market tension, Trump, alongside NATO Secretary-General Mark Rutte, announced that European allies will soon purchase billions of dollars’ worth of US-made weapons, including Patriot missile systems, destined for Ukraine. The move is viewed as further escalation of global instability, which typically benefits precious metals like Silver.

Fed Outlook and Interest Rate Uncertainty Cap Gains

However, Silver's upside may face some resistance following Fed Chair Jerome Powell’s latest comments. Powell warned that inflation could rise this summer as a direct result of tariff pressures, possibly forcing the Federal Reserve to hold off on interest rate cuts.

Silver, a non-yielding asset, tends to suffer when interest rate expectations shift higher, as investors seek yield elsewhere. The market is also reacting to Trump’s ongoing criticisms of the Fed and Powell, calling again for interest rates below 1%, sparking debate over central bank independence.

Outlook

If geopolitical risks remain elevated and inflation data supports Powell’s warning, Silver prices may continue their upward climb toward $39.00 and beyond. However, Fed policy will be a key counterbalance in determining whether this rally has more room to run.

Explore More on Tredu.com:

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