FX.co ★ Silver Climbs to Fresh 14-Year High

On Monday, silver surged by over 1% to surpass $46.5 per ounce, marking its highest level in 14 years. This increase occurred as the US dollar weakened, underlined by escalating concerns of a potential US government shutdown. Investors approached trading with caution ahead of crucial US economic data expected this week, which could influence the Federal Reserve’s future policy direction. The PCE report released on Friday indicated that inflation pressures remained steady, bolstering expectations that the Federal Reserve has the opportunity to further reduce interest rates this year. The markets currently assign approximately a 90% probability to a rate cut next month and about a 65% likelihood of an additional cut in December. Supply and demand imbalances have further supported silver prices, with the Silver Institute forecasting a fifth consecutive annual deficit in 2025, predicting that demand will exceed supply by over 100 million ounces, which could lead to further reductions in inventories.