Silver Price: XAG/USD extends upside to near $29.80 on renewed safe-haven demand

LONDON (January 3) Silver price (XAG/USD) rises further to near $29.80 in Friday’s European session. The white metal gains as demand for safe-haven assets has improved on renewed geopolitical tensions. According to reports from Axios, US President Joe Biden discussed possible strikes on Iran’s nuclear facilities with his national security team, with few weeks remaining for President-elect Donald Trump to take administration.

Axios reported that White House National Security Advisor Jake Sullivan presented President Biden with options for a potential US attack on Iran's nuclear sites. Historically, demand for safe-haven assets, such as Silver, improves in heightened geopolitical uncertainty.

Additionally, prospects of high inflation under the administration of Trump, as he is expected to tighten immigration controls, elevate import tariffs, and lower taxes, have also strengthened safe-haven demand. Silver tends to face high demand as investors use it as a hedge against inflation.

Meanwhile, the US Dollar (USD) edges down on Friday after a sharp rally on Thursday, with investors focusing on the US ISM Manufacturing PMI data for December, which will be published at 15:00 GMT. The Manufacturing PMI is estimated to have remained unchanged at 48.4, suggesting that factory activities contracted steadily.

10-year US Treasury yields drop to near 4.55% even though the Federal Reserve (Fed) is certain to pause the current policy-easing spell in the policy announcement on January 29.

FXStreet