As of 4:03 a.m. ET, silver traded at $61.185, up 0.57%, after touching a new lifetime high of $61.47 an ounce. Prices briefly spiked to $61.6145, marking the strongest level ever recorded.
Silver’s record-setting performance is being powered by a rare combination of severe supply tightness and intense speculative inflows. The market has more than doubled in 2025, far outperforming gold’s 60% year-to-date gain.
Borrowing rates for physical silver remain elevated, signaling continued tightness even after October’s extreme supply squeeze. London vault inflows have eased the crunch slightly, but Chinese inventories are now at decade lows, adding fresh pressure on the market.
Traders are also aggressively pricing in a quarter-point Fed rate cut at the central bank’s Dec. 9–10 meeting. Lower rates typically boost demand for non-yielding precious metals, and silver is benefiting more sharply than gold as speculative capital continues to pile in.
David Wilson, commodities strategy director at BNP Paribas, said silver’s rally is being amplified by its “big retail and speculative base.” Once prices broke through the $60 level, he said, “momentum brought in more money.”
How Fed policy expectations are fueling the rally
Investors are not only watching the December meeting but also looking ahead to Fed leadership changes in 2025. Kevin Hassett, the leading contender to replace Jerome Powell as Fed Chair, signaled this week that he sees “plenty of room” for substantial rate cuts next year. This has strengthened bullish sentiment across precious metals markets. Bond yields globally are hovering near their highest levels since 2009, increasing expectations that policymakers will pivot soon — a dynamic that typically accelerates safe-haven buying.
Silver’s nearly 20% jump in the past three weeks reflects that policy optimism as much as physical market conditions.
What speculative money and ETF flows reveal about market sentiment
The surge in speculative positioning is one of the clearest indicators of where traders think silver is headed next.
Last week, silver-backed ETFs recorded their largest weekly inflow since July, signaling renewed institutional appetite. Options markets are showing similar momentum: call volumes in major silver ETFs hit levels comparable to the October short squeeze, revealing that investors are positioning for more upside.
Some analysts warn the market may be overheating. Marex Group’s Guy Wolf said silver prices appear “overexcited” and estimated they may be 15% above fair value. Still, he noted that private-wealth interest in alternative assets continues to support the broader precious metals complex.
Despite warnings of a potential correction, Wilson of BNP Paribas said bullish sentiment remains strong enough that even predictions of $100 silver are no longer considered unrealistic by some traders.
Are potential US tariffs adding fuel to the rally?
Another emerging factor is policy uncertainty. Silver was added to the US critical minerals list last month, prompting questions about whether the federal government might impose new trade restrictions or tariffs.
That concern is keeping more metal onshore. As a result, Comex inventories remain near historic highs, even after slipping from October’s peak.
The policy backdrop is adding another layer of tightness to an already constrained supply chain.
As of 3:54 p.m. Singapore time, silver traded 1.3% higher at $61.4850. Gold held near $4,207.94, while platinum and palladium declined. The Bloomberg Dollar Spot Index was flat after a modest rise in the previous session.
Will a Fed rate cut push silver above $65?
Silver hit a recent high of $60.66 per ounce on December 9, 2025, up more than 90% year-over-year, powered by a severe supply squeeze, soaring demand from solar and electronics, and strong investor momentum. Markets now price in an 85% chance of a 25-basis-point Fed rate cut at the December 9–10 meeting to support a cooling labor market, though policymakers remain divided.
With tight supplies, rising industrial use, and easing expectations, a break above $65 is increasingly plausible — but sustaining it will still depend on weaker yields, a softer dollar, and continued demand strength.
A Fed cut would historically push silver higher by 18–22% in the year after the first reduction, as lower rates reduce the opportunity cost of holding non-yielding assets and weaken the dollar. Still, hawkish guidance can trigger profit-taking, tempering gains as seen in past cycles.
Forecasts generally lean bullish: short-term models see silver reaching $65.22 by mid-December, while Bank of America maintains a $65 long-term target amid persistent market deficits. CoinPriceForecast expects $63.34 by Dec 12 and $65.85 by Dec 16, while Trading Economics projects $58.65 by quarter-end and $63.78 over 12 months. A rate cut may accelerate the climb, but industrial demand and ETF inflows remain the primary engines of the rally.
