Global financial markets witnessed a significant flight to safety on Thursday, March 13, 2025, as escalating geopolitical tensions and renewed trade war fears triggered a massive capital reallocation into traditional safe-haven assets. The XAG/USD pair, representing the spot price of silver, surged by approximately 4% in a single trading session, one of its most substantial single-day gains in recent months. Silver prices on COMEX reached a more than one-week high, last quoted at $80.735 per ounce.
This rally occurred alongside a broader precious metals movement, with gold prices climbing over 1% to $5,063.51 per ounce following the release of key U.S. economic data. The U.S. Commerce Department's report on personal consumption expenditures (PCE), delayed from last fall's government shutdown, indicated inflation rose 2.9% year-over-year in December, with core prices accelerating to a 3% annual increase.
The primary catalyst for the safe-haven rush is escalating geopolitical friction, particularly between the U.S. and Iran. U.S. President Donald Trump issued a stark warning to Tehran, stating that "really bad things" are imminent unless Iran agrees to limit its nuclear program within 10 to 15 days. This comes as Iran, a significant oil producer, prepares for a joint naval exercise with Russia and recently conducted military drills in the Strait of Hormuz—a vital chokepoint handling approximately 20% of the world's oil.
Concurrently, oil prices neared six-month peaks, on track for their first weekly gain in three weeks. West Texas Intermediate (WTI) crude hit $67.03 a barrel and Brent reached $72.33 earlier in the day, their highest levels in over six months, driven by concerns over potential supply disruptions. Analysts note that "the most important price driver on the oil market at present is concern about an escalation of the conflict between the US and Iran," according to Carsten Fritsch of Commerzbank AG.
The silver rally was technically significant, with the XAG/USD pair breaking decisively above key resistance levels, including the 200-day moving average at $31.75. Data from the Commodity Futures Trading Commission (CFTC) showed a notable increase in net-long speculative positions in silver futures preceding the rally, indicating institutional positioning for volatility. Market analysts attribute the move to a classic risk-aversion scenario, evidenced by a broader sell-off in risk-sensitive assets like equities.
Despite the bullish momentum, trading silver remains challenging due to the market's propensity for large, unpredictable intraday swings, which can frighten leveraged traders into closing positions. The metal's daily MACD indicator, while beginning to curl higher, had slipped back into negative territory after being significantly overbought at the end of January.
