Silver climbed 2.2% to $36.76 an ounce Monday, touching $36.90 intraday for its highest level since February 2012, as dollar weakness and monetary policy expectations drove continued demand for precious metals.
The rally extended silver’s breakout above $36 last week, with futures contracts gaining 2.1% to $36.91 per ounce in New York trading. Gold advanced 0.5% to $3,328.22 per ounce, maintaining its own momentum as investors await developments in U.S.-China trade negotiations.
Silver’s year-to-date performance now mirrors gold’s 26% advance, establishing both metals among 2025’s strongest-performing assets. The parallel gains reflect broader precious metals demand driven by currency debasement concerns and geopolitical uncertainty. 
Interest Rate Sensitivity
Market participants are positioning ahead of the Federal Reserve’s upcoming policy meeting, where officials may signal the trajectory for interest rates through year-end. Lower rates typically benefit non-yielding assets like precious metals by reducing the opportunity cost of holding them relative to interest-bearing securities.
Brett Elliott, content director at precious metals marketplace APMEX, projects silver could reach $40 per ounce by December, representing a 20% gain from current levels. This target reflects both technical momentum and fundamental drivers including industrial demand and monetary debasement hedging.
Dollar Dynamics
The dollar’s recent weakness has provided crucial support for precious metals, which are priced in the U.S. currency. Dollar weakness makes metals more attractive to international buyers while reflecting underlying concerns about U.S. fiscal sustainability and monetary policy accommodation.
Silver’s volatility typically exceeds gold’s during market moves, amplifying both gains and losses. This characteristic has contributed to silver’s ability to match gold’s percentage returns despite trading at significantly lower absolute price levels.
Market Structure
Industrial applications account for roughly half of silver demand, distinguishing it from gold’s primarily investment and jewelry-focused market. This industrial component includes electronics, solar panels, and medical applications, creating demand sensitivity to economic growth expectations.
Investment demand through exchange-traded funds and physical purchases has supplemented industrial consumption, particularly as inflation hedging strategies gain prominence among institutional and retail investors.
The precious metals rally occurs against a backdrop of persistent inflation concerns and currency devaluation risks across major economies. Central bank gold purchases have reached multi-decade highs, while silver benefits from both monetary and industrial demand drivers.
Silver’s approach toward the psychologically significant $40 level will test whether current momentum can overcome potential profit-taking pressure from investors who have benefited from the metal’s substantial gains over recent months.
