Silver's Value Swoops past $40 USD, Marking a High Not Seen Since 2011
In a significant development for the commodities market, the silver price reached a fresh all-time high on Tuesday, surging to as high as $40.93 per ounce. This marks the first time since 2011 that silver has surpassed the $40 mark, with the last peak occurring in April of that year at $47.94.
The surge in silver price can be attributed to a variety of factors. Many of the same economic conditions that drove the silver price to that level in 2011 are present in today's market. These include significant uncertainty around the economy, a global debt crisis, and a dovish US Federal Reserve policy.
In addition, the silver price is benefiting from the high gold price, as some investors look for safe-haven assets at lower entry points. Silver, often considered a sister metal to gold, tends to follow gold's price movements but offers a lower entry point for investors seeking to diversify their portfolios.
Another factor driving the silver price is its increasing industrial applications. This has created a structural supply deficit in the market, providing underlying fundamental support for investors.
The jobs market, however, is showing signs of weakness. July's nonfarm payroll report indicated slowing growth, featuring a downward revision of 258,000 fewer jobs in May and June combined. Analysts predict further weakness in the jobs market, with expectations of 73,000 jobs being added to the economy in the next US jobs market report, due on Friday, September 5.
The silver market is also facing uncertainty due to the federal appeals court's recent decision to strike down the majority of President Donald Trump's tariffs. The ruling, a seven-to-four decision, deems the levies to be unconstitutional. While the tariffs will remain in place until October 14, allowing the White House to appeal the decision to the Supreme Court of the US, the ruling has spooked investors, pushing 10 and 30 year bond yields up and driving a selloff in equity markets.
Inflation has been moving further from the Fed's 2 percent target, and expectations are rising that the Fed will cut interest rates when it meets next from September 16 to 17. This could further boost the silver price, as lower interest rates tend to increase investment in precious metals.
Looking ahead, analysts predict that the silver price is likely to continue its upward trend. The next expected peak for silver prices in euros is likely around the $43–$44 per ounce level in the medium term during 2025-2026, with a breakout phase targeting new highs; this would translate approximately to a near-term local high before possibly reaching all-time highs above $50 by 2030. Factors supporting this include expectations of US Fed rate cuts and a weaker US dollar, which have recently pushed silver toward $39–$41 levels in 2025.
In conclusion, the silver market is experiencing a surge in price due to a combination of economic uncertainty, industrial demand, and expectations of US Fed rate cuts. While the jobs market is showing signs of weakness, the overall outlook for the silver price remains positive, with analysts predicting further gains in the medium and long term.
