Silver extends gains above $60 on rate-cut hopes, tight supply
Silver extended gains after breaking above $60 an ounce for the first time on Tuesday, with traders betting on further monetary easing by the Federal Reserve and continued supply tightness.
The white metal rose to a record $60.9213 an ounce on Wednesday, building on a 4.3% increase in the previous session. Silver’s rapid advance in recent days has been supported by expectations the US central bank will deliver a quarter-point rate reduction at the end of its December 9 to 10 meeting. Lower borrowing costs are a tailwind for non-yielding precious metals.
Traders are also looking beyond this week’s Fed decision in search of clues on US monetary policy next year. Kevin Hassett, the frontrunner in President Donald Trump’s search to replace Jerome Powell as Fed chair, said Tuesday that he sees plenty of room to substantially lower rates.
Silver’s rally has also been helped by a tight physical market, which is still recovering from a historic supply squeeze in October. Though this crunch has eased as more metal flows into London vaults, borrowing rates remain elevated — an indication of lingering tightness. Other markets are now seeing supply constraints, with Chinese inventories at decade lows.
Silver was up 0.3% at $60.8647 an ounce as of 7:52 a.m. in Singapore. Gold rose 0.1% to $4 211.30 an ounce, and platinum and palladium were both steady. The Bloomberg Dollar Spot Index was flat after closing the previous session up 0.1%.
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