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Silver Surges to $37, Outshines Gold Amid Escalating Middle East Tensions

Silver prices skyrocketed to a 13-year high on Tuesday, surging past $37 an ounce as investors flocked to safe-haven assets amid mounting geopolitical risks in the Middle East.

Spot silver rose by as much as 2.2%, reaching $37.26 per ounce—its highest level since early 2012. Silver futures mirrored the trend, climbing to $37.33 in New York trading.

The rally in silver was sparked by increasing speculation that the United States may soon become more directly involved in the ongoing Israel-Iran conflict. The potential for a wider regional confrontation has rattled global markets, prompting a shift toward defensive investments.

Gold Takes a Back Seat

Traditionally, times of geopolitical uncertainty drive investors to both gold and silver. However, gold’s reaction remained subdued on Tuesday. Spot gold edged up just 0.2% to stay below $3,390 an ounce, underperforming its sister metal.

The divergence in the two metals’ trajectories has widened recently, with the gold-to-silver ratio now at a three-month low. Notably, gold and silver have traded in opposite directions for four consecutive sessions—a rare occurrence. Historically, they tend to move in tandem nearly 79% of the time, according to BullionVault data spanning the past 50 years, and around 76% over the past year.

Analysts Weigh In

“Gold’s muted response might seem surprising at first,” said Carsten Menke, Head of Next Generation Research at Julius Baer Group, in an interview with Bloomberg. “But when we look at historical patterns, these geopolitical shocks often don’t lead to lasting gains in gold.”

Despite the pause, analysts remain optimistic about gold’s outlook. “Gold is still on a bullish path,” UBS noted in the BullionVault report, pointing to strong underlying sentiment.

Nicky Shiels, strategist at MKS Pamp, believes the Israel-Iran standoff could serve as a fresh catalyst for gold, potentially driving it toward April’s all-time high of $3,500. “This conflict introduces nuclear risk and even World War III concerns,” she said, highlighting the metal’s continued appeal during crises.

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