Silver futures surged to a fresh record of Rs 1.78 lakh per kg on Monday on the Multi Commodity Exchange (MCX), supported by a weak US dollar and rising expectations of an interest rate cut by the US Federal Reserve.
The most actively traded March silver contract jumped Rs 3,668, or a little over 2 per cent, to Rs 1,78,649 per kg, with a trading volume of 15,750 lots. The latest rally continues the metal’s sharp upward trajectory driven by speculative buying amid tightening supply conditions.
Since November 20, silver has gained Rs 21,245, climbing from Rs 1.57 lakh/kg to Rs 1.78 lakh/kg. Analysts attribute the surge to increasing bets that the Fed will ease its monetary policy, alongside profit-taking in the dollar index, Further, the metal rose tracking gains in gold.
Comex silver hits high at $57.86
As per a Bloomberg report , Comex silver futures also extended gains in global markets. Prices climbed to an all time high of $57.86 an ounce on Monday before paring some gains The metal has now risen for six consecutive sessions and has doubled in value this year, significantly outperforming gold’s 60% rise.
Traders are now pricing in an 87% probability of a quarter point rate cut at the Fed’s policy meeting attributed to weak US labour market data, government shutdown, and dovish commentary from Fed officials.Non-yielding precious metals tend to do well in low interest rate environments.
Supply concerns
Analysts say supply concerns have intensified following a squeeze in London silver inventories. With gold prices hitting a pause after a strong rally, investor focus shifted sharply to silver.
Additionally, traders are monitoring potential tariff implications after silver was recently added to the US Geological Survey’s list of critical minerals. This has raised caution among exporters, with concerns that a sudden premium in the US may limit future global availability.
ETF inflows indicate rising investor demand
Investment demand has strengthened as well, with inflows into physically backed silver exchange-traded funds (ETFs) gaining momentum over the past few weeks. This follows a phase of profit-booking in October, when prices touched earlier highs.