Silver Prices Rally to Record Highs Amid Fed Rate Cut Hopes and Mixed Global Indicators

New Delhi, September 2, 2025 - Silver prices surged to multi-year highs on Tuesday, driven by growing expectations of an imminent U.S. Federal Reserve interest‐rate cut, a weakening dollar and robust industrial demand.

In India’s futures market, silver contracts maturing in December on the Multi-Commodity Exchange (MCX) climbed ₹588, or 0.47%, to hit a fresh peak of ₹1,25,249 per kilogram. Market participants attributed the rally to elevated safe-haven demand amid geopolitical uncertainties and speculation over a Fed rate reduction later this month.

On the international front, COMEX December silver futures in New York soared to $41.99 per troy ounce, marking the highest level since 2011. Traders noted that subdued U.S. inflation readings and commentary from Federal Reserve officials had bolstered expectations of looser monetary policy, further supporting precious‐metal prices.

Despite the futures strength, spot silver (XAG/USD) traded lower, slipping 0.77% to $40.42 per ounce amid short-term profit-taking and a firmer dollar index. Analysts observed that while the broader trend remains bullish, near-term volatility is likely as investors digest mixed signals from U.S. macroeconomic data and central-bank rhetoric.

Economic and market drivers:

• U.S. Fed Rate Outlook: Markets are pricing in nearly a 90% chance of a 25-basis-point Fed rate cut at the September policy meeting.
• Dollar Weakness: A softer dollar has made dollar-denominated precious metals more attractive to overseas buyers.
• Industrial Demand: Strong demand for silver in solar panels and electronics continues to underpin prices.

Looking ahead, traders will watch forthcoming U.S. employment and inflation reports for further cues on the Fed’s policy stance. In the domestic market, analysts expect silver to test ₹1,27,000 per kg if Fed easing expectations firm further.