Silver prices rose in European trading on Monday, extending gains for the fourth consecutive session and continuing to break record highs after surpassing the 50-dollar mark per ounce for the first time in history. The metal also approached the 52-dollar threshold amid strong bullish momentum.

The rally comes as demand for precious metals as safe-haven assets remains robust, driven by renewed trade tensions between the United States and China and expectations that the US Federal Reserve will continue cutting interest rates.

Price Overview

• Silver prices today: Silver rose 3.4% to an all-time high of 51.71 dollars per ounce, up from the session’s opening level of 50.02 dollars, after touching an intraday low of 50.01 dollars.

• On Friday, silver gained 1.5%, marking its third straight daily advance.

• Last week, silver climbed 4.2%, achieving its eighth consecutive weekly gain — the longest winning streak since May 2020 — supported by strong demand from retail investors.

Trade Tensions

On Friday, US President Donald Trump threatened to impose 100% tariffs on Chinese imports to the United States, while simultaneously announcing new export restrictions on advanced software, set to take effect on November 1. The move came as part of Washington’s response to Beijing’s curbs on the export of rare-earth metals and sensitive industrial equipment.

In turn, the Chinese government defended its measures as legitimate steps to safeguard national interests, though it has so far refrained from retaliatory tariffs on American goods — signaling its intent to avoid a renewed escalation in the trade war between the world’s two largest economies.

Bullish Outlook

Goldman Sachs on Sunday projected that silver prices would continue rising over the medium term, driven by private investment inflows. However, the bank also cautioned that short-term volatility and downside risks remain higher for silver compared to gold.

Gold prices rose in European trading on Monday, extending gains for the second consecutive session and continuing to break record highs, coming very close to trading above 4,100 dollars per ounce for the first time in history.

The rally comes on the back of renewed safe-haven demand amid escalating trade tensions between the United States and China, as well as growing expectations of interest rate cuts by the US Federal Reserve.

Price Overview

• Gold prices today: Gold rose by 1.5% to 4,078.22 dollars, up from the opening level of 4,017.92 dollars, after touching a session low of 4,007.54 dollars.

• On Friday, gold prices gained more than 1.0%, resuming their upward trend after a brief pause for profit-taking and correction.

• Last week, gold rose by 3.4%, marking its eighth consecutive weekly gain — the longest winning streak since late December 2024.

Trade Tensions

On Friday, US President Donald Trump threatened to impose 100% tariffs on Chinese imports to the United States, while also announcing new export controls targeting advanced software, set to take effect on November 1. The measures come as Washington’s response to Beijing’s recent restrictions on exports of rare earth metals and sensitive industrial equipment.

China, for its part, defended its export controls, calling them justified measures to protect its national interests. However, Beijing has so far refrained from imposing retaliatory tariffs on American goods, signaling its desire to avoid a renewed escalation in the trade war between the world’s two largest economies.

US Interest Rates

• According to CME Group’s FedWatch Tool, the probability of a 25-basis-point rate cut at the October meeting currently stands at 96%, while the likelihood of keeping rates unchanged is just 4%.

• To reassess these expectations, investors are closely monitoring the release of new US economic data, as well as upcoming comments from Federal Reserve officials.

Gold Market Outlook

Kyle Rodda, analyst at Capital.com, said: “It’s interesting that developments in the Middle East have recently had a limited impact on the gold market, but we’re now seeing renewed risk sentiment driven by escalating trade tensions between the US and China.”

SPDR Gold Trust

Holdings in the SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose by 3.72 metric tons on Friday, bringing the total to 1,017.16 metric tons — the highest level in nearly two weeks.

The euro fell in European trading on Monday against a basket of major global currencies, resuming its decline after Friday’s brief rebound against the US dollar. The single currency is now heading toward a two-month low, weighed down by fresh political developments in France, the euro area’s second-largest economy.

The French presidency announced the formation of a new government led by Sébastien Lecornu, with President Emmanuel Macron reappointing one of his closest allies, Roland Lescure, as finance minister.

With inflationary pressures once again building across the eurozone, expectations for further interest rate cuts by the European Central Bank have diminished for the remainder of this year. To reassess those expectations, investors are awaiting additional economic data and remarks from ECB officials.

Price Overview

• Euro exchange rate today: The euro fell by more than 0.2% against the dollar to 1.1592, down from the opening level of 1.1618$, after reaching a session high of 1.1630.

• On Friday, the euro rose 0.5% against the dollar — its first gain in five days — recovering from a two-month low of 1.1542.

• Last week, the euro lost 1.0% against the dollar — its second weekly decline in three weeks and the sharpest drop since late July — amid the ongoing political crisis in France.

US Dollar

The US dollar index rose around 0.3% on Monday, resuming gains after a brief pause in the previous session and moving closer to a two-month high, reflecting continued strength of the greenback against a basket of major and minor currencies.

This advance came after US President Donald Trump signaled openness to dialogue with China to resolve trade disputes between the world’s two largest economies, easing concerns following his earlier threats to impose tariffs of up to 100% on Chinese imports.

Political Developments in France

Over the weekend, the French presidency announced the new government lineup under Prime Minister Sébastien Lecornu, with President Macron reinstating Roland Lescure — one of his closest allies — as finance minister.

The appointment came amid a deep political crisis after Lecornu’s previous government resigned just hours after being formed, leaving a vacuum and heightened political tension in Paris.

The main priority for the new French government is to address the budget crisis and push through the national spending bill — a move seen by observers as an attempt to calm markets and build a negotiating bridge with various parliamentary blocs.

However, the decision to name Lescure, a staunch Macron ally, as finance minister has cast doubts over the government’s longevity. Opposition parties have already threatened to bring down the cabinet quickly if it fails to distance itself from Macron’s earlier policies.

European Interest Rates

• Money-market pricing currently implies less than a 10% chance of a 25-basis-point ECB rate cut in October.

• Traders have scaled back bets on further monetary easing, signaling that the current rate-cut cycle is effectively over for this year.

• Policymakers at the European Central Bank believe no additional rate cuts are needed to achieve the 2% inflation target, despite new forecasts pointing to lower rates over the next two years.

• Sources indicate that unless the eurozone faces another major economic shock, borrowing costs are expected to remain at current levels for some time.

• Investors are now awaiting fresh economic data across Europe and closely monitoring comments from ECB officials to reassess policy expectations.

Japan’s new Liberal Democratic Party (LDP) leader, Sanae Takaichi, suffered a major setback after the Komeito Party — the LDP’s long-time coalition partner — withdrew from the ruling alliance. Takaichi is now scrambling to secure enough parliamentary support to become Japan’s first female prime minister.

If Takaichi fails to gain sufficient backing in parliament, she may be forced to lead a minority government or call an early election — a scenario that could trigger further pressure on the yen and Japanese markets.

Price Overview

• USD/JPY today: The dollar rose 0.75% against the yen to 152.28¥, up from Friday’s closing level of 151.13¥, after touching a low of 151.73¥ earlier in the session.

• On Friday, the yen had climbed 1.25% versus the dollar — snapping a seven-day losing streak — after hitting an eight-month low of 153.27¥ earlier that day.

• That rebound marked the yen’s biggest one-day gain since August 1, driven by Komeito’s withdrawal from the ruling coalition and renewed fears of US–China trade tensions.

• For the week, the yen fell 2.5% against the dollar — its third weekly loss in a month and the sharpest since September 2024 — following Takaichi’s victory in the LDP leadership race.

Political Developments

Markets quickly reassessed the political outlook for Japan’s new LDP leader, Sanae Takaichi, after Komeito — the LDP’s traditional coalition partner — withdrew from the alliance on Friday, dealing a heavy blow to her hopes of becoming the country’s first female prime minister.

The partnership between the LDP and Komeito had lasted roughly 26 years, providing the parliamentary support needed to pass legislation. However, disagreements over party financing and unmet demands from the junior partner led Komeito to announce its departure from the coalition.

Without Komeito, the LDP no longer commands a majority in both chambers of parliament, raising doubts about Takaichi’s ability to form a stable government. She must now persuade other parties to cooperate in order to assemble a viable parliamentary administration.

Markets are closely watching whether Takaichi can secure sufficient backing or will instead face the prospect of a fragile minority government or early elections — outcomes that could weigh heavily on the yen and Japanese equities.

Analysts’ Views

• Carol Kong, currency strategist at Commonwealth Bank of Australia in Sydney, said: “The USD/JPY rally has been almost uninterrupted, and it seems that only profit-taking could temporarily halt the climb.”

• She added: “In the short term, confirmation of Takaichi’s appointment as prime minister and the upcoming Bank of Japan meeting in October may act as catalysts for further yen weakness, especially if she reinforces her dovish fiscal and monetary stance and the central bank signals no near-term rate hikes.”

• Karl Schamotta, chief market strategist at Corpay in Toronto, noted that traders have grown increasingly skeptical about Takaichi’s ability to push through fiscal stimulus and resist the Bank of Japan’s tightening plans.

• He added: “This reflects Japan’s underlying inflation dynamics — households are demanding change as inflation remains elevated.”

Interest Rate Outlook

• Following Takaichi’s leadership victory, market pricing for a 25-basis-point rate hike by the Bank of Japan in October fell from 60% to 25%.

• Yen swap markets now imply just a 41% chance of a rate hike by December — down from 68% before the LDP leadership election.