Is silver’s record high due to U.W. rate-cuts bets or supply tightness?

“Investor interest in precious metals has surged, partly driven by concerns over rising debt levels in major economies

Silver prices climbed to all-time highs on Monday, as expectations that the Federal Reserve will cut interest rates further this month and persistent concerns over global supply tightness sparked a fresh rally.

In afternoon European trade, silver futures in New York were up 1.2% at $57.86 a troy ounce after hitting an intraday high of $58.61, while spot prices gained 1.7% to $57.35 an ounce after reaching $57.88. Prices have soared 99% this year, outpacing both gold and platinum.

The surge followed a pause in trading on Friday due to a 10-hour outage at CME Group’s data center in Illinois caused by a cooling-system failure.

Markets are currently pricing in a nearly 88% chance that the U.S. central bank will reduce rates by a quarter point in December amid persistent concerns over labor-market weakness and dovish signals from some Fed policymakers. Lower interest rates tend to boost the appeal of non-yielding assets that don’t pay dividends or interest.

Silver prices are also supported by concerns that the U.S. might include the metal in future tariff policies after adding it to the Geological Survey’s list of critical minerals last month, fueling significant inflows into the U.S. market.

Meanwhile, inventories on the Shanghai Futures Exchange have plummeted to their lowest levels in a decade and those on the Shanghai Gold Exchange to a nine-year low, Commerbank analysts said, citing Bloomberg data.

This contraction was driven by a surge in Chinese silver exports in October, mostly shipped to London, where severe shortages have occurred. If silver deliveries were to return to China, global supply outside of the country could become even more constrained, the analysts said.

Silver lease rates—the cost of borrowing the physical metal—rose significantly this year.

London, the global trading hub for physical silver, typically holds hundreds of millions of ounces in vaults to ensure liquidity. However, inventories have fallen sharply as concerns over potential U.S. tariffs prompted traders to shift holdings to the U.S. Additionally, rising demand for silver-backed exchange-traded funds has absorbed more of the metal, further tightening supply.

Investor interest in precious metals has surged in recent months, driven in part by concerns over rising debt levels in major Western economies and fears of currency devaluation. Gold prices have risen 60% this year, surpassing the $4,200 mark.

Silver, which typically tracks gold’s movements, has the potential for larger price swings as its smaller market size makes it more sensitive to fluctuations in the dollar.

The gold-to-silver ratio has recently decreased, meaning the price of silver is rising at a faster rate. It currently takes around 73 ounces of silver to buy one ounce of gold, down from 89 ounces at the end of August.

The white metal is also much cheaper than gold, attracting a broad range of investors seeking more affordable safe-haven assets, and is widely used in industry—from the manufacture of solar panels to artificial-intelligence semiconductors.

According to the Silver Institute, a nonprofit global industry association, the silver market is also set for a deficit for the fifth consecutive year in 2025 due to production constraints, expanding industrial demand and growing investment interest.”