Gold rises ahead of Fed rate cut decision, silver hits $60/oz milestone
Gold climbed on Tuesday (December 9) as investors stayed upbeat ahead of the US Federal Reserve’s interest-rate decision, while silver surged to an unprecedented US$60 per ounce on the back of tight supplies and robust industrial demand.
- Gold prices increased as investors anticipate a highly probable interest rate cut from the Federal Reserve, a move that typically benefits non-yielding assets.
- Silver reached a new record high, surging 4.3% to surpass the $60 per ounce milestone.
- Silver's rally is attributed to strong industrial demand forecasts (from solar and EV sectors), constrained mine output, falling inventories, and its designation as a U.S. critical mineral.
Spot gold was up 0.6% at US$4,211.77 per ounce by 3.21pm ET (2021 GMT), with US gold futures for February adding 0.4% to finish at US$4,236.20.
Silver outshone the precious metals complex, jumping 4.3% to US$60.74 per ounce and marking a fresh record high.
Analysts said traders are betting on years of strong industrial consumption, particularly from sectors such as solar power, electric vehicles and charging networks, as well as data centres and artificial intelligence.
A recent report from industry body the Silver Institute projects that these themes will keep demand elevated through to 2030.
The rally has also been underpinned by constrained mine output, falling inventories worldwide, expectations that the Fed will continue cutting interest rates, and Washington’s decision to place silver on its list of critical minerals.
Some fund managers warn that, with the market stuck in deficit, price risks remain skewed to the upside despite the metal’s notoriously sharp swings.
Attention is now fixed on the Fed, whose two-day policy meeting concludes on Wednesday.
Futures markets are pricing in about an 87.4% probability of a 25-basis-point cut this week, a backdrop that typically favours non-yielding assets such as gold and silver.
Stronger-than-expected economic data have so far failed to derail the move.
The US Labour Department’s latest JOLTS survey showed job openings rising to 7.67 million in October, comfortably above economists’ forecasts of 7.15 million and signalling a resilient labour market.
Yet gold largely brushed off the report, with some market strategists arguing that the metal is being pulled higher by silver’s explosive gains and optimism over looser monetary policy.
Some analysts now see scope for silver to push beyond US$70 per ounce in the first half of 2026, while projecting that gold could be on course towards US$5,000 if rate cuts continue and geopolitical risks persist.
In other precious metals, platinum advanced 2.8% to US$1,688.39 per ounce, and palladium added 2.6% to trade at US$1,503.74.
Reuters
