## Geopolitical Conflicts Drive Silver to Record Highs, Safe-Haven Sentiment Dominates the Market

The escalating situation in the Middle East has reignited safe-haven buying. During Monday’s Asian trading session, silver (XAG/USD) surged past the $69.00 mark, hitting a new all-time high with a 2.5% increase. This rally is driven by the ongoing escalation of geopolitical tensions between Israel and Iran.

According to media reports, Israeli officials are increasingly concerned that Iran is expanding ballistic missile production and is rebuilding nuclear facilities previously damaged by Israeli military strikes. These actions have attracted significant attention from Washington, with U.S. officials preparing to brief the new administration on military response plans. Amid this uncertainty, global investors are flocking to traditional safe-haven assets, with silver, as a precious metal safe-haven tool, becoming a favored investment.

## Federal Reserve Policy Remains Steady, Rate Cut Expectations Fall Short

From a monetary policy perspective, market consensus on the Federal Reserve maintaining interest rates at the January meeting has become more solidified. Although U.S. inflation data showed signs of softening in November, it did not alter the Fed’s cautious stance.

After the November Consumer Price Index (CPI) release, overall inflation slowed to 2.7% year-over-year, down from 3% in October and below economists’ forecast of 3.1%. More notably, the core CPI, which excludes food and energy volatility, fell from 3% last month to 2.6%, also below the expected 3.1%. Despite the positive inflation trend, the Fed remains cautious about prematurely easing policy and is unlikely to announce a rate cut in the near term.

## Geopolitical Risks and Monetary Policy Resonance

The breakthrough in silver prices actually reflects the combined effect of two major factors: increased uncertainty in the Middle East and the relatively tightening global central bank policy environment. In this context, as a traditional safe-haven asset, silver is increasingly favored by risk-averse investors, and its subsequent trend remains worth watching.