Silver raced toward $70.00 — a new record high—before slipping just short of that level during Tuesday’s Asian session. Investors rushed into silver as a safe-haven asset amid rising global tensions. It was expected, given that headline news was dominated by uncertainty between the US and Venezuela, while ongoing attacks on energy infrastructure in Eastern Europe kept markets uneasy.
Donald Trump added more fuel to the fire, commenting on the seizure of Venezuelan oil and ships. Whenever political and military risks flare up, people rush to precious metals like silver. It’s a classic play—when the world feels shaky, silver’s appeal as a store of value goes way up.
Lower Interest Rate Expectations Support Silver
There’s more fuelling this rally. Silver keeps getting a boost from growing expectations that the Federal Reserve will cut interest rates again. Since silver doesn’t pay interest, it usually shines brightest when rates drop. Lower rates make holding metals more sensible than holding yield-generating assets.
Federal Reserve Governor Stephen Miran chimed in, cautioning that refraining from rate reductions could push the economy into recession. He also suggested that large cuts may not be necessary over the long run, while borrowing costs are likely to fall in the short run. That message just confirms what traders already suspect: the environment remains friendly for precious metals.
Economic Data in Focus After Strong Rally
Now, all eyes turn to the next batch of US economic data, especially third-quarter GDP numbers. The consensus? The US economy should grow about 3.2% on an annualised basis—a step down from last quarter. If growth softens further, talk of more rate cuts will only get louder.
After this sharp run-up, a period of consolidation—or even a slight pullback—wouldn’t surprise anyone. Still, with geopolitical tensions running high and the Fed expected to keep rates low, silver prices look well-supported around these levels.
