Spot Silver scaled a fresh 11 1/2-year peak of $32.518 per troy ounce on Monday, as indications of easing inflation in the United States added to market expectations the Federal Reserve could reduce borrowing costs soon.
Markets are now pricing in about a 65% chance of a Fed rate cut occurring by September, according to the CME FedWatch tool.
Lower interest rates reduce the opportunity cost of holding Silver, which pays no interest.
Geopolitical tensions in the Middle East have also underpinned the precious metal after Iranian President Ebrahim Raisi and Foreign Minister Hossein Amirabdollahian died in a helicopter accident.
“Silver’s relative cheapness compared to gold and its strong fundamentals are invigorating investor interest,” analysts at ANZ wrote in a research note.
This week’s investor focus will likely set on the minutes of the Federal Reserve’s latest policy meeting due out on Wednesday along with remarks by a host of Fed officials.
As of 7:37 GMT on Monday Spot Silver was gaining 0.94% to trade at $31.792 per troy ounce.
Earlier in the session, the precious metal touched highs not seen since December 18th 2012.
Silver Futures for delivery in July were gaining 2.68% to trade at $32.097 per troy ounce.
The US Dollar Index, which reflects the relative strength of the greenback against a basket of six other major currencies, was inching down 0.03% to 104.465 on Monday.
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