Silver prices surged past $40/oz for the first time since 2011, driven by expectations of U.S. Federal Reserve rate cuts, persistent inflation, and tight supply. Spot silver rose 2.7% to $40.72, while gold also climbed 1.2%.
Analysts cited weakening consumer sentiment, Fed policy uncertainty, and geopolitical tensions as key drivers. Market focus is now on upcoming US jobs data, which could influence the Fed’s next move. UBS Analyst, Giovanni Staunovo commented, “The market is watching for Friday’s US job market report, anticipating that this would allow the Fed to resume rate cuts from September onwards (given) this supports investment demand.”
Concerns over the independence of the US central bank have risen as US President Donald Trump continues to critique the Fed and its policies. Fed Governor Lisa Cook was fired last week, though judges have been inconclusive as of yet as to whether she can continue in the role. Additionally, a federal appeals court has ruled that the tariffs imposed by Trump may have been illegally imposed, and so while they remain in place, the case is now resting with the court.
In light of all of these concerns, banks like Morgan Stanley see further upside for both silver and gold.
