Silver has rebounded above $58, approaching record highs, after a profit-taking decline was quickly reversed. This turnaround was prompted by new data that strengthened confidence in an imminent Federal Reserve rate cut, refocusing attention on the factors that drove silver prices to record levels earlier this week. The release of the delayed September Personal Consumption Expenditures (PCE) index and the University of Michigan survey both indicated that the likelihood of a near-term Fed rate cut remains strong and helped to temper one-year inflation expectations. This environment has increased the appeal of non-yielding metals like silver.
Additionally, data pointing to slowing employment trends, including private payroll figures and corporate layoff statistics, suggests a greater likelihood of policy easing, which led to a rapid adjustment in market pricing that supported precious metals.
Structural elements have also contributed to the recovery of silver prices. These include low visible inventories on exchanges, renewed accumulation in Exchange Traded Funds (ETFs), and industry forecasts of a supply deficit by 2025, all of which have tightened the market and intensified short covering. Meanwhile, sustained industrial demand driven by solar technology and other green initiatives provides a medium-term outlook supportive of higher prices.
