Silver reaches historic peak

Activity in the precious metals market continues. After a brief pullback, silver experienced a rapid recovery, crossing the $58 per ounce threshold and moving toward historic highs. Behind this rise are growing expectations for easing in the U.S. Federal Reserve's (Fed) interest rate policies.

FED INTEREST RATE CUT EXPECTATIONS STIR MARKETS

The U.S. Personal Consumption Expenditures (PCE) data for September and the University of Michigan's consumer confidence survey have strengthened the possibility that the Fed may cut interest rates in the near future. In particular, the decline in inflation expectations has made silver, which does not offer interest yields, more attractive. This situation allowed for a rapid recovery from the sharp sell-off wave seen at the beginning of the week and pushed prices upward quickly.

UNEMPLOYMENT AND ECONOMIC COOLING INCREASE DEMAND FOR SAFE HAVENS

Employment data from the U.S. private sector and layoff announcements by companies have indicated a slowdown in the economy and a decrease in hiring. This picture has strengthened expectations for a looser monetary policy while accelerating investors' flight to safety in the markets. Investors have turned to silver as a store of value.

In addition to macroeconomic data, the rapid depletion of silver stocks on exchanges has also been one of the factors causing prices to rise. Purchases made through Exchange Traded Funds (ETFs) have further deepened supply constraints in the sector. The "supply deficit" projected for 2025 is also tightening the market, leading to the rapid closing of short positions and further climbing of prices.

Silver is not only a commodity that attracts investor interest but is also used as a critical raw material in the industrial sector. Steady demand from solar energy panels and clean technology fields serves as a significant indicator that silver prices are unlikely to fall in the medium term.