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Silver surpasses $44 and scales new 14-year highs
AI Summary
- Silver prices rose to over $44 an ounce, reaching a new 14-year high, driven by weakness in the US dollar and increasing demand from retail investors.
- The US dollar index slipped, reflecting expectations of further Federal Reserve interest rate cuts, with markets pricing in a 90% probability of a 25-basis-point rate cut at the October Fed meeting.
- Fed Chair Jerome Powell's remarks are awaited for more clarity on US monetary policy, as retail investors turn to silver as a cost-effective safe-haven asset compared to gold.
Silver prices rose in the European market on Tuesday, extending gains for the fourth consecutive session after breaking above $44 an ounce for the first time since 2011, setting a new record high. The rally was supported by continued weakness in the US dollar.
The move was also fueled by accelerating demand from retail investors, who view silver as undervalued compared to gold, which continues to hit fresh all-time highs.
Price Overview
Silver prices today: The metal climbed 0.6% to $44.34 an ounce, the highest since May 2011, from an opening level of $44.07, after touching a low of $43.64.
At Monday’s settlement, silver prices gained 2.3% in their third straight daily advance, supported by robust demand for the white metal.
US Dollar
The US dollar index slipped 0.1% on Tuesday, marking a second consecutive decline and moving away from a two-week high of 97.82, reflecting ongoing weakness against a basket of major global currencies.
Beyond profit-taking and corrective moves, the dollar remains under pressure from growing expectations of further Federal Reserve interest rate cuts in the coming months.
US Interest Rates
Fed Governor Steven Miran said on Monday that the central bank is underestimating how restrictive its current policy stance is, warning that the labor market will be at risk if significant rate cuts are not delivered.
According to CME’s FedWatch tool, markets are currently pricing in a 90% probability of a 25-basis-point rate cut at the October Fed meeting, with just a 10% chance of no change.
Jerome Powell
Investors are awaiting Fed Chair Jerome Powell’s remarks later today at the Greater Providence Chamber of Commerce’s Economic Outlook Luncheon in Rhode Island, where he is expected to provide more clarity on the outlook for US monetary policy.
Retail Demand
As retail investors seek safe-haven assets amid the ongoing global shift toward looser monetary policy, silver has emerged as a cost-effective option.
The current surge in silver prices reflects growing recognition among retail investors that the white metal remains significantly undervalued compared to gold, which continues to set historic highs.
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