Silver tops $50 an ounce for first time amid geopolitical, economic uncertainty

Silver surpassed $50 an ounce for the first time on Thursday amid supply shortages and an economic environment that supports the precious metal.

Silver spot It briefly rose above $51 per ounce during Thursday’s trading session after breaking the $50 per ounce threshold earlier in the day. It has since fallen below $49 per share where it opened on Thursday. The last time silver traded around these levels was in January 1980.

Spot gold prices fell 2% on Thursday after surpassing the $4,000 level on Wednesday for the first time.

Precious metals investors took profits in both silver and gold after safe-haven asset prices fell in the wake of the crisis Ceasefire agreement Declared in the war between Israel and Hamas in Gaza.

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“Speculators are taking some gold flakes off the table Ceasefire in Gaza “It works because it lowers the temperature in a historically volatile region,” Tai Wong, an independent metals trader, said in a Reuters report.

“Gold and silver may need further consolidation, but the main drivers of the rally, reserve diversification and large and growing global sovereign debt, remain fully valid and keep the upside outlook intact,” Wong added.

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Silver prices exceeded $50 an ounce for the first time on Thursday. (Michael Nagel/Bloomberg via Getty Images/Getty Images)

Gold’s rise this year has been driven by geopolitical tensions, as well as strong demand from central banks and rising outflows. Exchange Traded Funds (ETFs)Expectations of interest rate cuts, economic uncertainty caused by tariffs and trade policy shifts.

The SPDR Gold ETF Trust, the largest fund backed by physical gold, is up nearly 50% this year. While smaller-cap mining ETFs, including the MicroSectors Gold Miners 3X ​​Leveraged ETNs, have advanced more than 740% as the best-performing ETFs this year, according to tracker VettaFi.

Silver’s 69% rise this year was driven by similar factors, as well as a shortage of supply in the spot silver market.

ETFs tied to the gold relative are also among the big gainers this year, with the iShares MSCI Global Silver Miners ETF up more than 148% and ProShares Ultra Silver up more than 148%.

One precious metals trader pointed out to Reuters that liquidity in the London silver market is limited due to ETF buying and metal transfers to the United States.

Fed meeting minutes show that policymakers remain concerned about inflation as they consider interest rate cuts

Precious metals such as gold have risen this year amid economic uncertainty. (Chris Ratcliffe/Bloomberg via Getty Images/Getty Images)

Markets expect Federal Reserve To continue cutting interest rates after the central bank made a 25 basis point cut last month, its first rate cut this year.

Traders are pricing in 25 basis point cuts at the Fed’s upcoming policy meetings in late October and mid-December.

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The expectation of additional interest rate cuts by the Fed this year comes despite signs that inflation is trending higher and further away from the central bank’s 2% target, as concerns about a weak labor market outweigh policymakers’ inflation concerns.

Reuters contributed to this report.