Silver prices are rising, approaching $48.50 per troy ounce. This increase comes from expectations that the Federal Reserve will cut interest rates in December. The CME FedWatch Tool shows a 67% chance for the cut, up from 62% the previous day, influenced by weak job cut data from Challenger. In October, US companies reported over 153,000 job cuts, the highest number in over 20 years. This news adds uncertainty to the US labor market, especially as the ongoing government shutdown restricts access to key data like Nonfarm Payrolls and the Unemployment Rate. St. Louis Fed President Alberto Musalem highlighted ongoing inflation risks, even as tariff effects lessen next year. The possibility of an interest rate cut is also influencing traders in Fed funds futures. The US government shutdown has reached a record length, with no resolution from the Senate. This uncertainty boosts demand for safe-haven assets like Silver and other precious metals. Several factors affect silver prices, including geopolitical issues, interest rates, and the strength of the US Dollar. Industrial demand, especially from electronics and solar energy, also plays a significant role. Silver prices often follow Gold prices because both are considered safe havens. As of November 7, 2025, silver is pushing near $48.50. This rise is fueled by growing expectations for a Federal Reserve rate cut next month, with the probability now at 67% due to signs of a softening labor market. The Challenger report recently indicated the highest job cuts for October in over 20 years. This supports the idea of a slowing economy, especially since official government reports like the NFP are delayed due to the shutdown. Recent data shows inflation easing to 2.8% year-over-year in October 2025, getting closer to the Fed’s target. This economic slowdown, coupled with the lengthy government shutdown, creates considerable uncertainty. As a result, there is increasing interest in safe-haven assets like precious metals. Derivative traders should note that this political risk may boost silver prices in the short term. In addition, we should not overlook the strong industrial demand for silver. Policies from earlier in the decade, like the 2022 Inflation Reduction Act, continue to support sectors such as solar energy and electric vehicles, which require large amounts of silver. This steady demand serves as a solid price foundation, irrespective of monetary policy shifts. However, we must also consider the relative value of silver. With gold trading near $3,000 an ounce, the gold-to-silver ratio is around 62. This is low compared to historical ratios seen in the early 2020s, indicating silver may be overvalued compared to gold. Traders might want to use options to protect against a possible price drop or a slowdown in silver’s increase.

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