Silver continued its upward momentum on Monday, approaching $38.50 per ounce as the U.S. dollar and Treasury yields eased. The shift in financial markets reflects growing investor expectations that the Federal Reserve could begin cutting interest rates as soon as July, supporting precious metals by reducing the opportunity cost of holding non-yielding assets.
Federal Reserve Governor Christopher Waller noted signs of a softening labor market and only modest inflationary pressure, comments that market participants interpreted as opening the door to monetary easing. Waller also downplayed concerns that tariffs would produce sustained inflation, reinforcing the view that the central bank may have room to lower rates later this year.
At the same time, developments in China are adding to positive sentiment for silver. Beijing’s new industrial modernization plan targets sectors such as machinery, automobiles and electrical equipment, which tend to be metal-intensive. By promoting upgrades across 10 major industries, the initiative is expected to support longer-term demand for industrial metals, including silver, bolstering the metal’s outlook alongside monetary tailwinds.
Market watchers say the combination of potential Fed rate cuts and strengthening demand from industrial policy in China creates a favorable backdrop for silver. Lower real rates historically enhance precious metals’ appeal, while industrial uses provide a structural component to demand that can help sustain prices even as financial conditions shift.
Traders are closely monitoring incoming U.S. economic data, central bank commentary and Chinese industrial activity for signals that could influence silver’s path. Any persistent indications of slower inflation or weakening payrolls could accelerate Fed easing expectations and further support precious metals. Conversely, signs of an unexpectedly strong labor market or higher inflation would likely temper enthusiasm for rate cuts and could weigh on silver prices.
For investors, the current environment underscores the dual drivers behind silver’s rally: monetary policy dynamics in the United States and real-economy demand from industrial policy in China. Together, these factors are contributing to renewed interest in silver as both a monetary hedge and an industrial commodity.