Spot silver prices hit a record high, reaching $49.86 per ounce, up over 2% intraday.

Spot silver prices hit a record high, reaching $49.86 per ounce, up over 2% intraday.

Spot silver prices hit a record high of $49.86 per ounce, up over 2% intraday, as investors sought safe havens amid economic uncertainty and expectations of further Federal Reserve rate cuts. The surge in silver prices was driven by a combination of factors, including concerns over the U.S. government shutdown, a drop in the Japanese Yen, and robust industrial demand.

The Japanese Yen plunged against the greenback after Sanae Takaichi, a fiscal dove, was elected to become the next Prime Minister, highlighting the safe-haven appeal of silver. Simultaneously, the ongoing U.S. government shutdown hampered public economic activity and risked job cuts, delaying crucial economic data, including the Non-Farm Payrolls report, ahead of the upcoming Federal Reserve policy meeting.

Markets are now pricing in about a 96% chance of a 25 basis point Fed rate cut in October and an 84% chance of another 25 bps cut in December. Fed Governor Stephen Miran has expressed support for an aggressive rate cut trajectory due to the impact of the Trump administration’s economic policies.

Silver prices were also supported by robust industrial demand amid supply constraints. Silver is facing its fifth successive year of a structural market deficit, with output of 844 million ounces well short of demand. The white metal plays a key role in solar energy, electronics, and broader electrification efforts.

The recent volatility in precious metals markets, including a historic two-hour crash in gold and silver, has highlighted the increasing risk and uncertainty in the market. Traders must recalibrate position sizing, margin use, and hedging strategies to navigate this new volatility regime.

Silver prices have surged significantly in 2025, up nearly 60% year-to-date, reflecting both safe-haven demand and tightening supply. The rally reflects higher gold prices diverting jewelry buyers toward silver as a cheaper alternative.