Two Key Catalysts: Rate Cuts & Thin Inventories Boost Silver
Silver prices surged above $46 per ounce on Friday to a 14-year high as expectations of interest rate cuts remain the driving force behind the silver market and tightening physical availability collide.
The latest PCE report showed inflationary pressures remain stable and reinforced the view that the Fed has room to cut rates further this year, with the market expecting another move in the coming months, reducing the cost of holding non-yielding assets and boosting demand for precious metals.
Industrial consumption remains strong, with solar-powered electric vehicles and electronics fabrication driving industrial demand. Supply has not kept pace, as most silver is produced as a byproduct of copper, lead, and zinc mining, resulting in only a slight increase in production in 2025 to around 844 million ounces, failing to eliminate the large structural deficit. The Silver Institute forecasts a fifth consecutive annual shortage in 2025, with demand exceeding supply by more than 100 million ounces and inventories declining.
Source: Newsmaker.id
