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What's Up With The Surge In Silver?

BY Benzinga | ECONOMIC | 01:19 PM EST

iShares Silver Trust (SLV) shares are trading higher on Wednesday. Rising geopolitical risks in the Middle East are pushing investors toward safe?haven assets, in addition to tensions surrounding Fed Chair Jerome Powell’s investigation.

  • iShares Silver Trust (SLV) stock is challenging resistance.?Why are SLV shares at highs?

How Powell’s Legal Troubles Impact Markets

What To Know: Powell revealed in a video posted Sunday night that the Federal Reserve has received grand jury subpoenas, calling them threats of criminal indictment tied to his congressional testimony about the Fed's $2.5 billion headquarters renovation. He called the case a "pretext" for political pressure aimed at influencing interest?rate decisions.

The situation has raised concerns that monetary policy could become vulnerable to short?term political goals. That risk, along with the potential for higher inflation, fiscal dominance and a weaker dollar, tends to push investors toward hard assets like silver, which have limited supply and no default risk.

Silver is also supported by its industrial uses in solar panels, electronics and batteries, reinforcing the idea that it can hold value when confidence in institutions or the Fed's independence is shaken.

Middle East Tensions Add To Safe-Haven Demand

At the same time, tensions in the Middle East are escalating. President Donald Trump has repeatedly threatened to intervene in Iran amid reports of thousands killed in a crackdown on anti?government protests, Reuters reported. European officials have warned that U.S. military action appears increasingly likely, with one suggesting it could happen within 24 hours.

Trump has warned that the U.S. could intervene in Iran. In a Tuesday interview with CBS News, he said the U.S. would take "very strong action" if Iran goes through with executing protesters.

A senior Iranian official has said that U.S. bases in regional countries including Saudi Arabia, the UAE and Turkey would be targeted if the U.S. strikes Iran.

The mix of domestic political uncertainty and rising geopolitical risk is pushing investors toward precious metals as a hedge against instability.

SLV Price Action: iShares Silver (SLV) shares were up 5.29% at $82.68 at the time of publication on Wednesday. SLV hit new 52-week highs this week, according to Benzinga Pro.

Image: Shutterstock

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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