Silver prices surged past $60 an ounce as traders factored in an imminent Fed rate cut and tightening supply conditions, reinforcing the precious metal's historical tendency to outperform gold during monetary policy easing cycles, ING commodity experts Ewa Manthey and Warren Patterson note.

Fed rate cut expectations and tight supply drive silver's outperformance

"Silver prices surged above $60 an ounce – a new record high – in Tuesday afternoon trading. This was driven by expectations that the Federal Reserve will cut interest rates this week and concerns over tightening supply. Historically, silver has outperformed gold during monetary policy easing cycles, as lower real yields tend to boost investor allocations and industrial activity."

"Silver prices have risen about 110% so far this year, outpacing gold prices. Silver is supported by concerns that the metal could become a target for future US tariffs after it was added to the U.S. Geological Survey's list of critical minerals last month. Mined silver production is down about 3% this year, with production constrained by declining ore grades and limited new project development."

"Looking ahead to 2026, we expect silver prices to remain well-supported by resilient industrial demand, limited supply growth, and a more favorable macroeconomic environment." (alg)

Source: FXstreet