Silver nears $29.80 on renewed safe-haven demand

The price of silver rose further to near $29.80 in Friday’s European session. The white metal gained 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 XAGUSD, 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 edged down on Friday after a sharp rally on Thursday, with investors focusing on the US ISM Manufacturing PMI data for December. The Manufacturing PMI is estimated to have remained unchanged at 48.4, suggesting that factory activities contracted steadily.

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

Silver technical analysis:

Silver rebounds to near the 20-day Exponential Moving Average (EMA), which trades around $29.85. However, the outlook of the white metal remains bearish till it stays below the upward-sloping trendline, which is plotted from the February 29 low of $22.30 on a daily timeframe.

The 14-day Relative Strength Index (RSI) rebounds above 40.00. A bearish momentum would come to an end if it sustains above that level.

Looking down, the September low of $27.75 would act as key support for Silver. On the upside, the 50-day EMA around $30.90 would be the barrier.