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Silver leads precious metals gains on rising geopolitical risks
Silver prices led a broad rally across the precious metals sector following a significant escalation in diplomatic and military tensions between the United States and Venezuela.
Silver futures (SIH26) recorded an exceptional gain of 7.94% at the market close, while platinum, palladium, and gold rose by 6.93%, 4.38%, and 2.82%, respectively.
The deployment of US forces in Caracas has substantially heightened the geopolitical risk premium, sparking fears of regional instability across Latin America.
Market focus is now shifting toward the upcoming US employment report on 9 January, which will be critical in determining the Federal Reserve’s interest rate trajectory for 2026.
Despite technical indicators signalling overbought conditions, the prevailing trend in silver remains robustly bullish, supported by a structural supply deficit and intensifying safe-haven demand.
Precious metals surge as US intervention in Venezuela triggers flight to safety
The precious metals closed with substantial gains as geopolitical friction between Washington and Caracas reached a critical inflection point. Over the weekend, reports confirmed that US forces detained Venezuelan President Nicolás Maduro in Caracas. This military action included precision strikes, resulting in significant damage to Venezuelan infrastructure and civilian impact.
Geopolitical specialists have described the event as a profound violation of sovereignty of independent nations, prompting a wave of condemnation from international leaders. Consequently, Latin America has emerged as a high-risk jurisdiction for investors. U.S. diplomatic and economic pressures have transitioned beyond Venezuela, increasingly targeting regional peers including Colombia, Mexico, and Cuba.
In response to this heightened systemic risk, precious metals commenced the trading week with a broad-based rally, with silver emerging as the top performer. The sector continues to benefit from a "flight to safety" as investors seek refuge from the prevailing uncertainty surrounding global geopolitical and trade dynamics.
The silver futures contract (SIH26) surged approximately 7.94% to reach $76.65 per ounce. Similarly, platinum (PLJ26) increased by 6.93% to $2,285, whilst palladium (PAH26) climbed 4.38% to settle at $1,765 per ounce. Gold futures (GCG26) also appreciated by 2.82%, reaching $4,451 per ounce.
The sustainability of this rally will likely be tested by the US employment data scheduled for release on Friday, 9 January. Should the figures reveal a cooling labour market, the probability of more aggressive interest rate cuts in 2026 may increase, further supporting non-yielding assets. Conversely, a resilient employment report would likely bolster the Federal Reserve’s current neutral-to-hawkish stance, potentially tempering the precious metals' momentum.
Technical analysis of the silver futures contract (SIH26)
From a technical perspective, silver maintains a robust bullish structure, supported by strong volume and a clear sequence of higher highs. Key observations include:
- Trend Context: The long-term trajectory for silver remains decisively bullish. The contract continues to trade comfortably above its 50, 100, and 200-period moving averages, indicating that the primary trend is firmly established.
- Resistance Levels: Should the current all-time high of $77.80 per ounce be breached, the primary upside target is the $80 psychological threshold. A decisive close above this level would signal potential for further price discovery into uncharted territory.
- Support Levels: In the event of a technical retracement, the primary short-term support is located at $70.50. Should this fail, the next structural floor is found at $60.00, which aligns closely with the 50-period moving average and serves as a significant psychological pivot point. A failure to hold the $60 zone would heighten the risk of a more pronounced mean reversion.
- Momentum and Volume: The Moving Average Convergence Divergence (MACD) exhibits a prominent bullish surge, though it is currently at an extreme historical extension. Similarly, the Relative Strength Index (RSI) is approaching overbought territory. However, the fact that these extreme readings are accompanied by high trading volumes suggests significant conviction behind the move, likely driven by the aforementioned fundamental catalysts.
Figure 1. Silver futures contract SIH26 (2024-2025). Source: Data from the COMEX Exchange; own analysis conducted via TradingView.
