Silver tops $65, Gold Edged Higher Globally

Silver surged past the $65 mark for the first time on Wednesday whereas gold prices edged higher. This follows weaker US labour data revived expectations of interest-rate cuts and weighed on the dollar.

Silver jumped 2.8% to a record $65.63 an ounce. The extending a rally has made precious metals one of the strongest-performing asset classes this year. Gold followed suit which spot prices surged 0.4% to $4,321.56 an ounce by 0230 GMT. US gold futures climbed 0.4% to $4,350.50.

The move follows fresh US data showed signs of cooling in the labour market. The unemployment rate surged to 4.6% in November which exceeded a Reuters poll forecast of 4.4%. It reinforces expectations that monetary conditions could ease further.

Market participants said that the data had built pressure on the dollar and boosted demand for non-yielding assets. The dollar index hovered near a more than two-month low touched a day earlier. It made greenback-priced bullion cheaper for overseas buyers.

“A lot of year-end wrap-ups have highlighted precious metals as the top-performing asset class,” said Brian Lan, managing director at GoldSilver Central. He also attributed Wednesday’s sharp move in silver largely to speculative flows. The traders sought higher returns amid growing economic uncertainty.

Silver’s rally has also been underpinned by structural demand factors. The metal is widely used in solar panels, electronics and electric vehicles. These sectors have expanded rapidly over the past decade.

According to data from the Silver Institute, global silver demand has remained high due to energy transition investments. Even mine supply growth has lagged.

Gold, traditionally is seen as a hedge against inflation and financial instability. The metal has benefited from a combination of central bank buying and shifting interest-rate expectations.

The World Gold Council has reported that central banks had added more than 1,000 tonnes of gold in 2023. It became one of the strongest accumulation phases on record, which was driven by diversification away from the US dollar.

Expectations of easier monetary policy have added to bullion’s appeal as the US Federal Reserve had delivered its third and final quarter-point interest-rate cut of the year last week.

This move was widely anticipated, comments by Chair Jerome Powell were perceived by markets as less hawkish than expected.

Traders are now expecting two additional rate cuts of 25 basis points each in 2026, according to interest-rate futures pricing. Lower interest rates tend to back precious metals by reducing the opportunity cost of holding non-yielding assets like gold and silver.

Investors have now focused on upcoming US inflation data for further policy signals. The Consumer Price Index is due on Thursday. It will be followed by the Personal Consumption Expenditures index on Friday, the Federal Reserve’s preferred inflation gauge.

Political developments have also contributed to a layer of uncertainty. US Treasury Secretary Scott Bessent stated on Tuesday that Kevin Warsh and Kevin Hassett were both eligible to lead the Federal Reserve.

Scott further added that any future nominee should have “an open mind.” Markets have remained sensitive to any such signals that could influence the Fed’s independence or policy stance.

Read More: Gold Prices Fall, Silver Prices Remain Steady

Elsewhere in the precious metals complex, platinum surged 2.5% to $1,896.40 an ounce. It is highest level in more than 14 years, backed by supply constraints and improving industrial demand. Palladium was steady at $1,602.60, after it had touched a two-month high earlier in the session.