During Tuesday's U.S. trading session, precious metals rallied as traders remained optimistic ahead of the Federal Reserve's rate decision, with silver soaring to an unprecedented $60 per ounce amid tightening supply. At press time, New York silver futures and spot silver both surged over 4% intraday, surpassing $61/oz and $60/oz respectively. Year-to-date, silver prices have climbed nearly 110%.
Spot gold rose 0.6% to $4,215/oz, while U.S. February gold futures gained 0.6% to $4,244.80/oz. Among other precious metals, spot palladium extended gains to 2.00%, reaching $1,502.12/oz, and spot platinum advanced 3% to $1,692.10/oz.
Investor demand for precious metals has surged in recent months, partly driven by rising debt levels and currency devaluation risks in major Western economies. Silver typically moves in tandem with gold but exhibits higher volatility due to its smaller market size and greater sensitivity to dollar fluctuations. Its lower price relative to gold has attracted investors seeking affordable safe-haven assets, while its industrial applications remain extensive.
Fawad Razaqzada, market analyst at City Index and FOREX.com, noted, "Expectations of robust industrial demand for silver in coming years are fueling its rally," adding that current buying momentum is exceptionally strong. Silver prices continue to draw support from persistent supply constraints, declining global inventories, impending Fed rate cuts, and its recent inclusion on the U.S. critical minerals list.
Bob Haberkorn, senior market strategist at RJO Futures, stated, "Gold’s upward trajectory is primarily driven by silver’s sharp gains and strong market anticipation of another 25-basis-point Fed rate cut." Earlier, the U.S. Labor Department’s JOLTS report showed job openings rose by 12,000 to 7.67 million in October, exceeding forecasts of 7.15 million, signaling labor market resilience that may temper rate-cut expectations. Post-data, traders priced in an 87.4% chance of a 25-bp cut this week, down 2 percentage points.
Haberkorn remarked that gold has largely shrugged off the jobs report, predicting, "We could see silver breach $70/oz by early 2026, while gold is on track toward $5,000/oz." A Tuesday report from the Silver Institute projected sustained industrial demand growth through 2030, fueled by solar energy, EVs and infrastructure, data centers, and AI.
Maria Smirnova, senior portfolio manager and CIO at Sprott Asset Management, emphasized, "Metals are inherently volatile, but unless supply deficits are resolved, silver has only one direction—up." In coming months, silver is poised to benefit from the same forces lifting gold: a weaker dollar, monetary easing, and safe-haven demand amid geopolitical tensions.
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