Silver climbs on safe-haven demand

Silver climbed toward $49 per ounce on Wednesday, reaching fresh 14-year highs as mounting global uncertainties and the prolonged U.S. government shutdown fueled investor demand for safe-haven assets. The metal’s rally has closely tracked that of gold, reflecting growing concerns over economic stagnation, fiscal instability, and geopolitical turbulence.

The U.S. government shutdown, now entering its second week, shows little sign of resolution as partisan gridlock in Congress continues to delay budget negotiations. The impasse has darkened the near-term economic outlook, postponed key data releases—including employment and inflation reports—and undermined investor confidence in U.S. governance.

The prolonged shutdown has also prompted speculation that the disruption could further weaken growth momentum in the final quarter of the year, adding pressure on policymakers to reach a compromise.

In financial markets, traders are increasingly confident that the Federal Reserve will cut rates by 25 basis points this month, with another reduction likely in December, as officials attempt to cushion the economy from both domestic and external headwinds. The resulting decline in real yields has provided additional support for non-yielding assets like silver, bolstering its appeal as both a store of value and a hedge against macroeconomic uncertainty.

Beyond U.S. developments, political turbulence in Europe and Asia has amplified global risk aversion. In France, the resignation of Prime Minister Sébastien Lecornu has deepened the country’s political crisis, with President Macron facing mounting pressure to restore stability. Meanwhile, in Japan, the election of Sanae Takaichi, a staunch supporter of Abenomics, as the nation’s next leader has introduced new speculation about the future of monetary and fiscal policy in Asia’s second-largest economy.

On the demand side, industrial consumption continues to play a vital role in silver’s strength. The solar and electronics industries remain key growth drivers, with ongoing expansion in renewable energy capacity and semiconductor production sustaining robust physical demand. The Silver Institute has projected that the global silver market will register a supply deficit for the fifth consecutive year in 2025, driven by rising industrial use and stagnant mine output.

Analysts note that if these trends persist—coupled with continued monetary easing and geopolitical volatility—silver could test the psychological $50 mark, a level not seen since 2011, potentially ushering in a new phase of investor enthusiasm for precious metals.