Silver rallies to new all-time high above $69 on Fed rate cut bets, USD weakness
- Silver posts strong gains at the start of the week and reaches a new all-time high above $69.
- A weaker US Dollar and expectations of further Federal Reserve rate cuts support precious metals.
- Geopolitical tensions and thinner year-end liquidity reinforce demand for non-yielding assets.
Silver (XAG/USD) extends its bullish momentum on Monday and trades around $69.05 at the time of writing, up 2.75% on the day, after hitting a fresh all-time peak at $69.47 earlier in the day. The white metal benefits from strong follow-through buying after several weeks of steady gains, supported by a macroeconomic and geopolitical backdrop that remains favorable for safe-haven assets.
The rally in Silver unfolds in an environment with persistent expectations of monetary easing in the United States (US). Markets continue to price in additional rate cuts by the Federal Reserve (Fed) into 2026, as recent data point to gradually easing inflationary pressures and a softer US labor market. A lower interest-rate environment reduces the opportunity cost of holding non-yielding assets, providing structural support for precious metals.
The softer US Dollar (USD) is another key driver. A weaker Greenback makes Silver more attractive to overseas investors. The US Dollar Index (DXY), which tracks the value of the Greenback against a basket of major currencies, trades around 98.35, easing slightly after reaching a one-week high late last week. This pullback in the US Dollar adds to Silver’s upside momentum, already underpinned by solid investment demand.
On the geopolitical front, tensions remain elevated and continue to encourage a cautious investor stance. Renewed frictions between Iran and Israel have revived concerns over a potential regional escalation, while rising tensions between the United States and Venezuela, particularly around Oil exports, add to global uncertainty. Meanwhile, diplomatic efforts related to the war in Ukraine are progressing slowly, with no decisive breakthrough, keeping geopolitical risk at an elevated level.
As markets move closer to year-end, declining liquidity could lead to periods of consolidation or mild profit-taking after the recent surge. Still, several US macroeconomic releases due on Tuesday, including the four-week average of the ADP Employment Change, the preliminary third-quarter Gross Domestic Product report, Durable Goods Orders, Industrial Production, and Consumer Confidence, could provide short-term direction for Silver.
Overall, as long as expectations of accommodative monetary policy, US Dollar weakness, and geopolitical uncertainty persist, the fundamental bias for Silver remains constructive, despite the risk of temporary pauses following the print of new record highs.
Silver FAQs
Silver is a precious metal highly traded among investors. It has been historically used as a store of value and a medium of exchange. Although less popular than Gold, traders may turn to Silver to diversify their investment portfolio, for its intrinsic value or as a potential hedge during high-inflation periods. Investors can buy physical Silver, in coins or in bars, or trade it through vehicles such as Exchange Traded Funds, which track its price on international markets.
Silver prices can move due to a wide range of factors. Geopolitical instability or fears of a deep recession can make Silver price escalate due to its safe-haven status, although to a lesser extent than Gold's. As a yieldless asset, Silver tends to rise with lower interest rates. Its moves also depend on how the US Dollar (USD) behaves as the asset is priced in dollars (XAG/USD). A strong Dollar tends to keep the price of Silver at bay, whereas a weaker Dollar is likely to propel prices up. Other factors such as investment demand, mining supply – Silver is much more abundant than Gold – and recycling rates can also affect prices.
Silver is widely used in industry, particularly in sectors such as electronics or solar energy, as it has one of the highest electric conductivity of all metals – more than Copper and Gold. A surge in demand can increase prices, while a decline tends to lower them. Dynamics in the US, Chinese and Indian economies can also contribute to price swings: for the US and particularly China, their big industrial sectors use Silver in various processes; in India, consumers’ demand for the precious metal for jewellery also plays a key role in setting prices.
Silver prices tend to follow Gold's moves. When Gold prices rise, Silver typically follows suit, as their status as safe-haven assets is similar. The Gold/Silver ratio, which shows the number of ounces of Silver needed to equal the value of one ounce of Gold, may help to determine the relative valuation between both metals. Some investors may consider a high ratio as an indicator that Silver is undervalued, or Gold is overvalued. On the contrary, a low ratio might suggest that Gold is undervalued relative to Silver.
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