Precious metals prices increased simultaneously in the trading session on Tuesday (US time) as investors maintained an optimistic mentality ahead of the US Federal Reserve (Fed) policy meeting. In particular, silver became the focus when it surpassed the $60/ounce mark for the first time in history, amid tight supply and strong industrial demand.
Spot gold prices rose 0.6% to $4,211.77 an ounce at 3:00 p.m. ET (8:20 p.m. GMT), while month-end gold futures on Comex closed a session with a gain of 0.4%, reaching $4,236.2 an ounce. Spot silver prices surged 4.3%, to $60.74/ounce, marking an all-time high.
According to Fawad Razaqzada, market analyst at City Index and FOREX.com, investors are betting on a strong industrial demand outlook for silver in the coming years, causing silver prices to increase rapidly. The current buying motivation is huge".
The latest report from the Silver Institute said that the solar energy, electric vehicles and charging infrastructure, data centers and artificial intelligence (AI) industries will be the main drivers of the strong increase in demand for industrial silver from now until 2030.
Silver prices are also supported by scarce supply, declining global inventories, and expectations that the Fed will start a rate cut cycle, and that silver has just been added to the US's important mineral portfolio.
The metal is already volatile, but if the shortage is not addressed, there is only one way which is to move up, said Maria Smirnova, senior investment director at Sprott Asset Management.
In the policy market, the Fed's two-day meeting will end in the early morning of Thursday with a decision on interest rates. Traders are now predicting an 87.4% probability of a 25 basis point cut this time.
According to Bob Haberkorn, senior strategist at RJO Futures, "the current increase in gold is largely due to the silver breakthrough and great expectations for a new interest rate cut".
In addition, the US Department of Labor's JOLTS report showed that the number of unemployed jobs in October reached 7.67 million, far exceeding the forecast of 7.15 million - a sign that the labor market is still strong. However, gold has been largely ignoring the data as cash flow continues into the precious metal.
Mr. Haberkorn predicted, "we could well see silver surpass $70/ounce in the first half of 2026, while gold is on its way to $5,000/ounce".
