Prime Business Africa
Silver traded within a narrow range on Tuesday, near its highest level since 2011, as markets continued to price in Federal Reserve rate cuts and industrial demand remained robust.
According to analysts at DHF Capital, today’s benchmark revision to US labor market data is expected to show a significant downward adjustment, reinforcing the narrative that the Fed may be lagging its full-employment mandate.
Attention turns also to the August Producer Price Index (PPI) and Consumer Price Index (CPI) figures scheduled for release midweek to better assess the Fed’s next moves. Traders see an 88% chance of a 25 bps cut next week. This dovish outlook paints a bullish scenario for silver.
Join our WhatsApp ChannelOn the industrial side, according to Bas Kooijman, the CEO and Asset Manager of DHF Capital, South Africa, “Tight physical market conditions continue to support the metal. China’s solar cell exports jumped more than 70% in H1 2025, led by strong shipments to India. Coupled with growing demand from EVs and electronics, this has deepened structural deficits.
“At the same time, investment flows remain favorable with Silver-backed ETP holdings standing at 1.13 billion ounces by the end of June,”Kooijman concludes in the analysis he made available to Prime Business Africa.
Meanwhile, gold set another all-time high on Tuesday, climbing above its previous peak as mounting expectations of Federal Reserve rate cuts and a softer dollar lifted demand. The metal extended gains from last week’s weak US jobs report, which prompted traders to fully price in easing this month and anticipate as many as three cuts by year-end.
Analysts at Exness, said the shift in policy outlook has become the dominant driver for the precious metal. “Markets assign nearly a 90% probability of a 25-basis-point cut at next week’s Fed meeting, with a smaller chance of a larger move,” says Li Xing, the Financial Markets Strategist Consultant at Exness.
Xing told Prime Business Africa that lower yields and a weaker currency have further enhanced the appeal of non-yielding assets like gold. “Investors now await producer and consumer inflation data due later this week, which could refine expectations for the scale and speed of policy easing.
“Signs of easing inflation could further raise expectations of a dovish stance from the Federal Reserve. Elsewhere, geopolitical tensions remain an additional support amid persistent regional instability in the Middle East and Eastern Europe,” Xing said.
On the demand side, central bank purchases and steady inflows into gold-backed ETFs continue to underpin the market.
