Silver surges to record on Fed rate cut optimism
Silver prices soared to a new all-time high on Friday, surpassing the $55 per ounce mark as investor optimism grew over a potential interest rate cut by the US Federal Reserve in December.
The precious metal jumped over 3% to $55.01 per ounce just after US markets opened on Friday.
Silver futures climbed 3.8% to $55.67 per ounce early Friday, with the metal up nearly 90% in 2025, outpacing gold’s 60% rise and positioning silver for its strongest year since 1979, according to Dow Jones Market Data.
Investor optimism has been fueled by comments from Federal Reserve officials. Earlier this week, Fed Bank of San Francisco President Mary Daly signaled support for a rate cut at the next policy meeting, following similar remarks from Fed Governor Christopher Waller. Lower interest rates tend to reduce the opportunity cost of holding non-yielding assets like silver, bolstering demand.
Mining stocks and ETFs mirrored the rally. US miners Hecla Mining Company (NYSE:HL) and Coeur Mining (NYSE:CDE) rose 3.5% and 3.6%, respectively, while Canadian producers Endeavour Silver Corp (TSX:EDR, NYSE:EXK), Pan American Silver Corp. (TSX:PAA, NASDAQ:PAAS), and Silvercorp Metals Inc (TSX:SVM, AMEX:SVM) gained between 3% and 4.7% and TSXV-listed developer Aftermath Silver Ltd (TSX-V:AAG, OTCQX:AAGFF) surged 7.7%. Silver-backed ETFs also climbed, with Abrdn Physical Silver Shares and iShares Silver Trust up 3% and 3.2%.
UBS analysts expressed continued bullish sentiment, forecasting silver could reach $55 per ounce by mid-2026. In a note earlier this month, the bank highlighted rising investment demand, broad strength in precious metals, and expectations of a weaker US dollar as drivers of further gains. UBS also cited elevated option volatility and ETF inflows as supporting factors.
“We continue to prefer a long position in silver, viewing pullbacks as opportunities to add exposure,” UBS analsyts wrote. The firm expects holdings in silver-backed ETFs to rise to 1,021 million ounces, up from 822 million currently.
According to UBS, industrial demand, particularly from electronics and solar applications, remains an ongoing supportive factor. While silver lacks the central bank backing enjoyed by gold, UBS sees room for revaluation as macroeconomic conditions favor further price momentum, maintaining a six-month bullish view.
