FX.co ★ Silver Sets Record High

Silver prices soared towards $60 per ounce on Tuesday, driven by strong expectations of an imminent 25 basis point cut by the Federal Reserve, coupled with a notable tightness in the physical market. Despite robust labor data casting some uncertainty over the medium-term forecast, futures pricing projects real policy rates that are advantageous for precious metals. Industrial demand has witnessed a significant upswing, particularly in sectors such as solar energy, electric vehicles, and electronics. Conversely, mine production has persistently failed to match consumption levels, resulting in a structural deficit. This supply shortfall has manifested in the market infrastructure, with observable reductions in benchmark stocks, limited availability in the London market and spot trading, and significant investments into silver-backed exchange-traded funds (ETFs). Collectively, these factors have intensified buying activity and propelled prices to new heights. Although a more hawkish stance from the Federal Reserve or a sudden surge in mine output could potentially temper these gains, the current rally is predominantly fueled by physical scarcity and substantial institutional demand.