Spot Silver scaled a fresh 14 1/2-year high of $48.76/oz. on Monday, supported by expectations of more Federal Reserve rate cuts, concerns over the impact of the US government shutdown and a drop in the Japanese Yen, which heightened the safe-haven appeal of the metal.
The Japanese Yen plunged against the greenback after Sanae Takaichi, a fiscal dove, was elected to become the next Prime Minister.
At the same time, the ongoing US government shutdown hampered public economic activity, risked job cuts and delayed crucial economic data, including the Non-Farm Payrolls report, ahead of the upcoming Federal Reserve policy meeting.
Markets are now pricing in about a 96% chance of a 25 basis point Fed rate cut in October and an 84% chance of another 25 bps cut in December.
Last week, Fed Governor Stephen Miran once again expressed support for an aggressive rate cut trajectory because of the impact of the Trump administration’s economic policies.
Additionally, robust industrial demand continued to support Silver prices amid supply constraints. Silver is facing its fifth successive year of a structural market deficit, with output of 844 million ounces well short of demand.
The white metal plays a key role in solar energy, electronics and broader electrification efforts.
Spot Silver was last up 1.19% on the day to trade at $48.57 per troy ounce.
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