Silver Price News: Silver Rises By 2% As Rate-Cut Hopes Bolster Safe Havens

Silver prices made solid gains on Tuesday, moving higher as the precious metals complex took support from rising expectations that the US Fed will cut interest rates in little more than two months.

Prices rose as high as $31.43 an ounce on Tuesday, compared with around $30.68 in late deals on Monday.

Both gold and silver moved higher on Tuesday on the back of comments by US Fed chair Jerome Powell on Monday who took note of the recent slower inflation figures for June and said the central bank wouldn’t need to wait for inflation to fall to its target of 2% before starting a rate-cutting cycle.

The markets are now fully pricing in an interest rate cut at the Fed’s planned meeting on September 18, just over two months away. Lower interest rates tend to weaken the US dollar and reduce the opportunity cost of holding precious metals – both bullish factors for gold and silver prices.

Twice in June, silver prices dipped below the $29.00 an ounce level, only to encounter strong buying that lifted prices, setting the market up for a breakout of the downward trend seen from late May through late June.

Elsewhere, attention in Asia was focused on China’s Third Plenum which began on Monday. The meetings – held roughly every five years – usually focus on charting a course for the economy in the coming years.

The outcome of the meeting will be closely watched for any signs of policies that would stimulate economic growth, particularly as China’s economy has slowed in recent months. China is both a major producer and consumer of silver, and its ongoing investments in clean energy and transport provide a supportive element for industrial demand for the grey metal.