Silver climbed above $40 an ounce for the first time since 2011 as investors increased bets that the United States Federal Reserve will cut interest rates at its upcoming policy meeting.
Spot silver rose as much as 1.4 percent to $40.29 an ounce on Monday to extend its year-to-date gains to more than 40 percent.
The metal is currently trading at its strongest level in 14 years as broad demand across precious metals continued to fuel price increases.
Gold advanced 0.7 percent in the early hours of Monday as investors sought safe-haven assets amid rising geopolitical tensions and concerns over financial stability.
Fed Policy Expectations
Market sentiment has shifted toward expectations of lower borrowing costs as the Federal Reserve prepares for its next meeting. A key U.S. jobs report due Friday is projected to reinforce calls for policy easing, further supporting precious metals that traditionally benefit when interest rates decline.
President Donald Trump’s repeated criticism of the Fed has also raised concerns over the central bank’s independence, adding to global market uncertainty and investor appetite for defensive assets.
Industrial and Structural Support
Silver’s rally is underpinned not only by monetary policy expectations but also by rising industrial demand. The metal is a key component in clean energy technologies, including solar panel manufacturing.
According to the Silver Institute, the global market is on track to record its fifth consecutive year of supply deficits.
Persistent tightness deepened as silver-backed exchange-traded funds recorded a seventh straight month of inflows in August, the longest run since 2020.
Outlook
Analysts note that silver’s dual role as both a precious and industrial metal positions it strongly in the current environment of geopolitical tension, fiscal uncertainty, and energy transition demand. With expectations of a Fed rate cut intensifying, the commodity is expected to maintain momentum, though market volatility remains high.