Silver Price holds gains above $46.50 due to Fed rate cut bets

• Silver price reached a fresh 14-year high of $46.64 on Monday.

• The US August inflation report increased the likelihood of the Fed delivering another interest rate cut in October.

• The grey metal gains as safe-haven demand rises on potential US government shutdown.

Silver price (XAG/USD) is trading around new 14-year high of $46.64, marked during the Asian hours on Monday. The non-interest-bearing Silver attracts buyers as the US August inflation report boosts the odds of the US Federal Reserve (Fed) delivering another interest rate cut in October.

It is worth noting that investors could put their bets on precious metals including Silver in terms of gaining better investment returns. Markets are now pricing in nearly an 89% chance of a Fed rate cut in October and a 66% possibility of another reduction in December, according to the CME FedWatch Tool.

The US Personal Consumption Expenditures (PCE) Price Index climbed 2.7% year-over-year in August, compared to 2.6% prior. This figure was in line with analyst forecasts. The core PCE, which excludes food and energy prices, came in at 2.9% YoY during the same period, also matching expectations.

Silver price also receives support from increased safe-haven demand as traders brace for shutdown risks of the United States (US) government. US President Donald Trump will meet congressional leaders on Monday to discuss government funding. Without a deal, a shutdown could begin from October 1, coinciding with new tariffs on trucks, pharmaceuticals, and more. The standoff could also delay the September payrolls report and other key data, per Reuters.

The US Dollar Index (DXY), which measures the value of the US Dollar (USD) against six major currencies, is losing ground and trading around 98.00 at the time of writing. The dollar-denominated Silver draws support as weaker Greenback makes it more affordable for foreign buyers.