Silver Surges to New High Amid US Rate-Cut Hopes and Global Uncertainty

Due to persistent demand for safe haven assets and growing prospects of US interest rate cuts, silver prices continued their upward trend, closing higher by 1.88% at 2,23,790. As the case for policy easing is strengthened by conflicting US economic data, markets are gradually factoring in two rate cuts next year.

Expectations that the Federal Reserve may become more accommodating in the upcoming months have been strengthened by lower consumer confidence in December and flat manufacturing output in November, despite the third-quarter GDP expanding at a strong 4.3% annualised pace.

Why Silver is Moving Upside?

After the US put a ban on Venezuelan oil shipments that were sanctioned, risk premiums for all commodities increased, further supporting prices due to geopolitical tensions. Due to a sustained structural supply shortage, robust industrial demand, and its position on the US Geological Survey's list of essential minerals, silver has increased by around 149% so far this year.

Following record exports of more than 660 tonnes in October to ease a crunch in London, Chinese silver inventories fell to their lowest level in ten years, raising supply-side concerns. Shanghai Gold Exchange volumes also dramatically decreased, and stocks in warehouses connected to the Shanghai Futures Exchange hit their lowest point since 2015. Liquidity outside of China is still limited, even though London vault holdings increased by 3.5% per month to 27,187 tonnes. Technically, the market is experiencing new buying, as seen by the 3.1% increase in open interest to 12,566 and the 4,137 price rise. Resistance is at 2,25,980, with more upside towards 2,28,170, while support is at 2,20,050, below which 2,16,310 may be tested.

Market Performance of Other Precious Metals

In 2025, bullion has also had a fantastic surge, breaking several record highs and rising 72% so far. Geopolitical uncertainties, expectations on additional US rate reduction, strong demand from central banks as a shift away from US securities and the dollar, and growing holdings in exchange-traded funds are just a few of the factors that have boosted gold.

According to Tim Waterer, Chief Market Analyst at KCM Trade, $5,000 appears to be a realistic goal for gold next year if the incoming Fed chairman adopts a more dovish stance on Fed policy. Rate reductions, a sustained strong industrial appetite, and supply constraints, according to Waterer, might position silver for a surge above $100 in 2026.

Two US interest rate drops are still anticipated by traders for the upcoming year. In a situation with low interest rates, non-yielding assets typically perform well. Palladium dropped 8% to $1,771.99 per ounce, while spot platinum dropped 0.4% to $2,441.20 per ounce after hitting an all-time high of $2,478.50 earlier in the day.