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Silver price ( XAG/USD) holds positive ground around $85.75 during the early European session on Tuesday. The white metal is set to retest a record high as traders pile into safe-haven metals amid renewed concerns over the US Federal Reserve (Fed) and its independence.

Fed Chair Jerome Powell said on Sunday that the US Department of Justice has served the central bank with subpoenas and threatened it with a criminal indictment over Powell’s testimony last June about the Fed’s building renovations. He called the threats a "pretext" aimed at putting pressure on the Fed to cut interest rates. Fed uncertainty ignites safe-haven assets such as Silver in the near term. 

“We see increased interference with the Fed as a key bullish wildcard for the precious metals in 2026,” said Julius Baer Group’s Carsten Menke. The silver market, smaller in size, is more sensitive to moves in rates and the dollar, so it’s “likely to react more strongly to such concerns,” he added.

Rising geopolitical tensions might contribute to Silver’s upside. Civilian protests in Iran are rising, and hundreds have been killed. Iran’s foreign minister claimed security forces had "full control" of the country following two weeks of ongoing upheaval, blaming Israel and the US for fomenting the nationwide protests in which hundreds of people have been killed. 

Traders will keep an eye on the US December Consumer Price Index (CPI) inflation data, which will be released later on Tuesday. This report could offer some hints about the US interest rate path and the next key trigger for market moves. In case of a hotter-than-expected outcome, this could lift the US Dollar (USD) and weigh on the USD-denominated commodity price in the near term. 

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