Gold prices declined in European trading on Tuesday for the first time in three sessions, pulling back from their six-week high as corrective moves and profit-taking picked up, alongside pressure from a recovering US dollar against a basket of global currencies.

Despite strong expectations for a US rate cut in December, investors are awaiting several key economic releases from the United States this week, which are likely to guide the Federal Reserve’s policy outlook.

Price overview

• Gold today: Prices fell 0.95% to $4,191.85 from an opening level of $4,231.75, after touching an intraday high of $4,236.02.

• Gold settled Monday up 0.35%, marking a second consecutive daily gain and hitting a six-week high at $4,264.60 an ounce amid strong safe-haven demand.

US dollar

The US Dollar Index rose about 0.1% on Tuesday, attempting to recover from a two-week low and heading for its first gain in seven sessions, reflecting a rebound in the greenback against major and minor currencies.

Beyond dip-buying, the dollar’s recovery comes as markets speculate that Federal Reserve Chair Jerome Powell will remain cautious about aggressively easing monetary policy and cutting interest rates.

US interest rates

• Kevin Hassett, now seen as the leading contender to replace Jerome Powell as Fed Chair, said interest rates “should be lower.”

• According to the CME FedWatch Tool, the probability of a 25-basis-point US rate cut in December is steady at 87%, while the likelihood of no change in rates is stable at 13%.

• To reassess these probabilities, investors are closely monitoring this week’s US economic releases, particularly data on private-sector employment and the personal consumption expenditures index—the Fed’s preferred inflation gauge.

Gold outlook

Tim Waterer, chief market analyst at KCM Trade, said: “Gold is underperforming today, but the broader picture remains intact—a picture that includes expected US rate cuts, which should support gold from a yield perspective.”

SPDR Gold Trust

Holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, rose by 4.58 metric tons on Monday, bringing total holdings to 1,050.01 metric tons—the highest since 22 October.

The euro slipped slightly in European trading on Tuesday against a basket of global currencies, giving up its two-week high against the US dollar amid modest corrective moves and profit-taking.

With uncertainty persisting over the likelihood of a European Central Bank rate cut in December, investors are awaiting Europe’s key November inflation readings later today to gain clearer evidence on the ECB’s monetary-easing outlook.

Price overview

• EUR/USD today: The euro dipped by less than 0.1% to $1.1603 from an opening level of $1.1609, after touching an intraday high of $1.1614.

• The euro ended Monday slightly higher against the dollar, having reached a two-week high at $1.1653 as expectations for a US rate cut in December continued to increase.

European interest rates

• Sources told Reuters that the European Central Bank is inclined to keep interest rates unchanged at its December meeting.

• Money-market pricing for a 25-basis-point ECB rate cut in December remains steady around 25%.

European inflation

To reassess these odds, investors are awaiting Europe’s key November inflation data, which will show how much pressure policymakers at the ECB still face.

At 10:00 GMT, the eurozone consumer price index is due, with market expectations pointing to a 2.1% annual increase in November, matching the previous reading. Core CPI is expected to rise 2.4%, also unchanged from the prior figure.

Outlook for the euro

At Economies.com, we expect that if inflation data comes in cooler than markets currently anticipate, the probability of a December ECB rate cut will rise — implying renewed downward pressure on the euro in the foreign-exchange market.

The Japanese yen fell in Asian trading on Tuesday against a basket of major and minor currencies, giving up its two-week high against the US dollar and heading for its first loss in four sessions, as profit-taking and corrective moves picked up.

Japan’s finance minister reaffirmed there is no divergence between the government and the Bank of Japan regarding their assessment of the economy, which she described as “modest” but showing signs of gradual improvement.

Price overview

• USD/JPY today: The dollar rose 0.25% to ¥155.78 from an opening level of ¥155.41, after touching an intraday low of ¥155.40.

• The yen ended Monday up 0.45% against the dollar — its third straight daily gain — reaching a two-week high at ¥154.66 following more hawkish comments from the Bank of Japan governor.

Finance minister comments

At a regular press conference on Tuesday, Finance Minister Satsuki Katayama said, in response to questions about Governor Kazuo Ueda’s recent remarks: “We do not believe there is any contradiction between the government’s view and the Bank of Japan’s view regarding the modest recovery of the economy, so we do not see this as a problem.”

BOJ Governor Ueda said on Monday that the central bank will examine the pros and cons of raising interest rates at its December policy meeting — the strongest indication yet that a hike this month is possible.

Katayama added that she expects the BOJ to continue close coordination with the government and to maintain a policy stance aimed at sustainably achieving the 2% inflation target, aligned with clear wage growth.

Japanese interest rates

• Sources told Reuters the Bank of Japan is preparing markets for a potential rate hike in December, reviving its earlier hawkish tone as concerns resurface over the yen’s sharp depreciation and as political pressure to keep rates low fades.

• Following Ueda’s remarks on Monday, market pricing for a 25-basis-point BOJ hike in December rose from 40% to around 60%.

• Investors now await further data on inflation, unemployment, and wage growth in Japan to reassess these probabilities.

Silver has long played a secondary role to gold — but in 2025, it has begun challenging it for the spotlight. Often dubbed “the poor man’s gold,” silver offers both an inflation hedge and exposure to industrial growth, giving it a uniquely dual appeal.

This year, the white metal has staged an exceptional rally. Prices surged to their highest levels in years, breaking multiple records. Silver surpassed its historic peak of $48.70 per ounce from April 2011, reaching $54.08 per ounce on October 17, 2025, in global markets. In India, spot prices climbed to a record ₹1,76,304 on October 14, 2025. October 2025 will be remembered as a watershed month for silver — not only did it hit a new all-time high, it also delivered its strongest monthly return ever.

The performance is striking: year-to-date returns exceed 70%, outpacing every major asset class, including equities, gold, and commodities.

Kineta Chhainwala, Assistant Vice President for commodity research at Kotak Securities, said silver’s outperformance was driven by a blend of safe-haven demand, a weaker dollar, lower interest rates, and strong industrial usage.

She added that silver lease rates have risen after the metal was included in the US list of critical minerals — a sign of tightening physical supply. Lease rates represent the annual cost of borrowing silver in the London bullion market; higher rates indicate scarcity.

Rise of silver ETFs

Traditionally, demand for gold and silver rises ahead of festivals such as Dhanteras and Diwali. With rising geopolitical tensions and global uncertainty, investors have been shifting more aggressively toward precious metals.

The sharp rise in silver prices relative to gold — combined with festive-season demand — triggered massive inflows into silver exchange-traded funds (ETFs), leading to shortages and causing these ETFs to trade at steep premiums over the underlying metal. The imbalance forced fund houses to temporarily halt new subscriptions to protect investors and restore stability.

Unlike gold ETFs, which have existed in India for over 20 years, silver ETFs are relatively new. SEBI approved them only in September 2021, with the first launches arriving in 2022 through ICICI Prudential.

In just a few years, interest skyrocketed. Assets under management jumped from ₹2,844.76 crore in October 2023 to ₹12,331 crore in October 2024 — and then to more than ₹37,518 crore by September 2025, more than tripling in a single year.

Data shows silver ETFs delivered a three-year average return of 39.14%, compared with 34.86% for gold ETFs.

In September 2025 alone, monthly inflows hit ₹5,342 crore — 28% of all passive-fund inflows — while gold ETFs attracted ₹8,363 crore. Combined, gold and silver accounted for about 72% of total flows, reflecting investors’ growing reliance on precious metals to diversify portfolios amid global instability.

With the advent of silver ETFs, participation has become far easier for retail investors compared with physical buying or futures trading.

Why is silver shining?

A supply-demand imbalance

The core reason behind silver’s surge is a persistent supply deficit. Global supply has lagged demand for five straight years, according to the Silver Institute. Another deficit is anticipated in 2025 amid weak mine output and lower recycling.

Supply is projected at around 1.03 billion ounces in 2025 versus demand of 1.148 billion ounces. Over five years, demand has exceeded supply by roughly 800 million ounces, with a fresh deficit of about 187 million ounces expected this year.

Because much of global silver output is a by-product of mining other metals, supply is slow to respond even when prices rise.

Industrial demand boom

Explosive growth in clean-energy industries has created immense demand pressure. Solar panels are the single largest consumer of silver, followed by electric vehicles, electronics, 5G components, and semiconductors.

Industrial demand is estimated at 680 million ounces in 2025 — more than half of global consumption.

The new safe haven

Beyond industrial strength, inflation pressures, geopolitical crises, and weak economic outlooks have lifted investment demand for silver. Global silver ETF holdings have risen to 0.82 billion ounces — the highest level since July 2022.

A century of dramatic cycles

Over the past century, silver has experienced long stretches of stagnation punctuated by dramatic spikes. It traded at $0.69 per ounce in 1925, crossed $1 only in 1962, doubled by 1967, and soared during the inflationary 1970s to reach $35.52 in 1980 during the infamous Hunt Brothers squeeze.

Prices then collapsed to $5 by 1982 and remained subdued until the post-2008 rally, which sent silver to $48.20 in 2011. It broke that level once again in 2025.

Will the rally continue?

Despite powerful momentum, analysts warn of volatility. They attribute the current surge to China’s shift toward clean energy, the disruption at Indonesia’s Grasberg mine, strong ETF inflows, and robust Asian demand.

Demand is expected to remain strong thanks to solar-energy expansion and EV adoption, while supply remains constrained by underinvestment in new mining projects.

Reports such as Motilal Oswal’s “Unprecedented Silver Market Boom 2030” argue the metal is in the early stages of a long structural bull market.

What should investors do?

Silver can be an effective tool for portfolio diversification and inflation hedging, with potential to outperform gold during economic recoveries.

Experts caution against chasing short-term buying frenzies and instead advise using silver as a strategic asset offering both industrial upside and inflation protection.

If your portfolio allocates around 15% to precious metals, a 50-50 split between gold and silver may reduce volatility while maximizing the complementary strengths of both metals.