Silver Soars to Record Highs: A Precious Metals Surge Driven by Fed Rate Cut Expectations
Silver prices shattered previous records, soaring to new all-time highs above $56 per ounce on Friday. This marked the most robust single-day rally in over a year, as precious metals reaped the benefits of renewed Federal Reserve rate cut expectations.
The white metal surged over 5% to reach highs of $56.72, representing a staggering 95% gain year-to-date – its best performance since 1979. This rally was primarily fueled by mounting expectations of a 25-basis-point rate cut at the Fed’s December 10 meeting, with probabilities surging to nearly 90%.
Lower interest rates reduce the opportunity cost of holding non-yielding assets like precious metals, making them increasingly attractive to investors. Specific supply constraints are also driving silver’s explosive performance, with Chinese silver inventories reportedly at their lowest level in a decade after massive shipments to London.
The U.S. Geological Survey’s recent designation of silver as a critical mineral has led some American holders to withhold supplies amid potential tariff concerns.
Impact on Silver Mining Stocks
Leading silver mining stocks responded dramatically to these developments:
- Aya Gold & Silver jumped 14.18%
- Andean Precious Metals rose 12.66%
- Discovery Silver Corp gained 12.39%
Industrial Demand for Silver
The industrial demand for silver reached record levels in 2024, driven by:
- Grid infrastructure
- Vehicle electrification
- Solar panel manufacturing
Source: Benzinga