Silver Climbs Past $40 as US Rate-Cut Bets Fuel Investor Demand
Silver traded above $40 an ounce for the first time since 2011 as expectations grew for an interest-rate cut by the Federal Reserve this month, boosting investor appetite for precious metals.
Spot silver rose as much as 1.4% to $40.2920 an ounce on Monday, taking gains for this year to more than 40% in a rally alongside gold, platinum and palladium. Bullion climbed as much as 0.7% to start the week, hitting its highest since a record in April.
Precious metals have benefited from strong investor appetite for havens amid geopolitical tensions and uncertain financial conditions — including US President Donald Trump’s repeated attacks against the Fed that have sown concerns over the central bank’s independence.
Bets have risen that the Fed will lower interest rates at its next policy meeting this month, and a key US jobs report this Friday is expected to reinforce those expectations. Lower borrowing costs tend to benefit precious metals, which do not pay interest.
Silver is also valued for its industrial uses in clean-energy technologies including solar panels. Against that backdrop, the market is headed for a fifth year of supply deficits, according to industry group the Silver Institute.
Investors have piled into exchange-traded funds backed by silver. Holdings expanded for a seventh consecutive month in August — the longest run of inflows since 2020. That’s drawn down the stockpile of freely available metal in London, leading to persistent tightness in the market.
Source: Bloomberg
