Silver prices (XAG/USD) surged sharply at the start of the week, climbing nearly 2.5% to trade around the $69.00 level during Monday’s Asian session, marking a fresh all-time high. The rally in the white metal is being driven by a renewed wave of safe-haven demand as geopolitical tensions between Israel and Iran intensify.
According to a report by NBC News, Israeli officials have become increasingly concerned that Iran is accelerating its ballistic missile production and rebuilding nuclear facilities that were damaged by Israeli military strikes earlier this year. The report added that Israeli authorities are preparing to brief US President Donald Trump on potential options for renewed military action against Iran.
Heightened geopolitical uncertainty typically boosts demand for traditional safe-haven assets, including precious metals such as Silver, as investors seek protection against rising global risks.
On the monetary policy front, expectations surrounding the Federal Reserve remain relatively stable. Despite softer-than-expected US inflation data for November, markets remain confident that the Fed will refrain from cutting interest rates at its January policy meeting, with dovish expectations failing to gain additional momentum.
US inflation figures released on Thursday showed that headline Consumer Price Index (CPI) inflation eased to 2.7% year-on-year in November, down from 3.0% in October and below market expectations of 3.1%. Core CPI inflation, which excludes food and energy prices, slowed to 2.6%, undershooting both forecasts and the previous reading of 3.0%.
Silver technical outlook: bullish momentum remains stretched
From a technical perspective, XAG/USD continues to trade firmly higher near $69.02 at the start of the week. The 20-period Exponential Moving Average (EMA), currently rising strongly at $61.14, remains well below the spot price, highlighting the strength of the prevailing uptrend but also signaling stretched conditions.
The 14-day Relative Strength Index (RSI) stands at 77.44, firmly in overbought territory, suggesting that a period of consolidation or corrective pullback cannot be ruled out. Nevertheless, a rising trend line originating from the $49.96 low continues to underpin the broader bullish bias.
With prices significantly extended above the 20-EMA, any pullbacks may attract buying interest near the $61.14 support zone, helping to preserve the upward trend. While momentum remains robust, the overbought RSI could limit near-term upside. A decisive break below the ascending trend line near $65 would weaken the bullish structure and expose the pair to a deeper retracement toward the December 3 high around $59.00.
On the upside, the psychological $70.00 level now stands as the next major resistance and a key hurdle for bulls to overcome.
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