Silver prices in the international market rose to a record high on Tuesday, December 9, 2025, surpassing the $60 milestone for the first time.
As reported by BBC, experts explain that industrial demand and supply shortages drive silver’s rally, as investors eye the Fed’s next move on interest rates.
Silver outpaced gold this year amid a global supply squeeze and another expected interest rate cut by the Federal Reserve.
The precious metal has more than doubled this year, driven by a mix of high inflation, supply constraints, and growing investor demand for electronics, solar panels, and ETFs.
The business investors explain that mining supply has declined over the past decade while demand continues to grow, creating a structurally tight market.
Experts hope that the Fed will slash rates and also help push silver to fresh highs.
According to CME FedWatch, markets are pricing in an 87.6% likelihood of a Fed rate cut on Wednesday which leaves only a little more than a 12% chance that rates will stay unchanged.
Silver now outperforms gold and stocks, though gold already enjoyed a spotlight this year and rose to almost 60%.
According to the experts, the US central bank is widely expected to cut its main interest rate by a quarter of a percentage point on Wednesday, December 10, 2025.
Spot silver hit a high of $62.018/oz on Wednesday, extending their gains after an over 100% jump so far in 2025.
The white metal, which is seen as a safe haven alternative to gold, was subject to a speculative frenzy this year amid expectations of tighter supplies and increasing demand in the coming year.
Investors tend to move money into gold and silver as demand from the technology industry remains high for the precious metals and interest rates come down and the US dollar weakens.
Economics professor from Nanyang Technological University, Yeow Hwee Chua, explains that when interest rates are cut, traders typically buy assets like silver because the benefits of keeping cash in the bank or buying short-term bonds fall.
"That naturally shifts demand toward assets viewed as stores of value, including silver," said Yeow Hwee Chua.
The US imports about two-thirds of its silver, which is used for manufacturing as well as jewelry and investment.
"Silver is not only an investment asset but also a physical resource," and more manufacturers are finding a need for the material, said Kosmas Marinakis from the Singapore Management University.
Marinakis further explained that manufacturers have been racing to secure supplies to ensure their operations are not interrupted by shortages, which has helped to push up prices on global markets, and he expects the price of silver to remain high in the coming months.
