Spot Silver extended gains to a fresh record high of $57.86/oz. on Monday, supported by ongoing supply tightness and rising expectations of an interest rate cut by the Federal Reserve this month.
Fed Governor Christopher Waller said last week that the US job market was weak enough to warrant another 25 basis point rate cut in December.
Also, New York Fed President John Williams said that a near-term rate cut remained possible, with labor market weakness posing a higher risk than elevated inflation.
And, Kevin Hassett, seen as a frontrunner to succeed Jerome Powell, has echoed US President Trump’s support for rate cuts.
Markets are now pricing in about an 87% chance of a 25 basis point Fed rate cut in December, compared to an 80% chance a week earlier.
Markets are also pricing in three additional rate cuts by the end of 2026.
Delayed US macro data also added to expectations of a December cut.
Lower interest rates tend to reduce the opportunity cost of holding Silver, which pays no interest.
“Silver benefits from the same factor as gold, plus the expectation of further improving industrial demand next year,” UBS analyst Giovanni Staunovo was quoted as saying by Reuters.
On the supply front, China’s silver exports rose to an all-time high of over 660 tonnes in October, data showed, while China’s inventories have decreased to their lowest level in a decade.
Spot Silver was last up 1.58% on the day to trade at $57.28 per troy ounce.
Last Friday, a data center fault disrupted trading on the Chicago Mercantile Exchange for several hours. Since this affected Comex futures and options contracts, some traders had to call brokers and dealers by phone to hedge their positions.
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