By Bas Kooijman, CEO and Asset Manager of DHF Capital S.A
Silver hovered near 14-year highs on Tuesday as investor sentiment remained strong ahead of this week’s expected Federal Reserve rate cut. Markets are nearly fully pricing a 25-basis-point reduction, with multiple cuts projected by year-end. President Trump further amplified the pressure, urging Chair Powell to act decisively due to housing sector weakness. The pressure on the central bank could also drive demand for precious metals as investors hedge against the erosion of the Federal Reserve’s independence.
Elsewhere, Canada’s central bank is also expected to ease policy this week, enhancing silver’s appeal as a non-yielding asset. Silver could find additional support if China’s central bank follows the Fed’s lead, as concerns about the economy continue. Meanwhile, industrial demand remains a key tailwind, with ongoing needs in the solar, EV, and electronics sectors continuing to tighten the physical silver market. Investors could remain attentive to the monetary policy decisions and new sentiment-moving data releases.