Gold advanced again to another all time high to $3,667.17 per ounce on Monday, posting a strong +$31 increase. Silver retreated slightly to $41.27 per ounce, declining by -$0.09. The precious metals continue to demonstrate remarkable strength in 2025, with gold achieving multiple record highs and climbing 47% year-over-year, while silver has surged 48% annually, reaching its highest levels since 2011.
Gold’s relentless ascent reflects mounting expectations of Federal Reserve interest rate cuts following Friday’s disappointing jobs report that showed only 22,000 new positions created in August, well below the expected 75,000. The unemployment rate increased to 4.3%, the highest since 2021, signaling a cooling labor market that has pushed markets to price in 89% probability of a 25 basis point rate cut at the Fed’s September 16-17 meeting. Some traders are even positioning for a larger 50 basis point reduction, with a 12% probability currently priced in. Beyond monetary policy expectations, safe-haven demand remains underpinned by uncertainty over U.S. tariffs and ongoing geopolitical tensions. Key economic indicators this week include the Producer Price Index on Wednesday and Consumer Price Index on Thursday, which could provide further guidance on the Fed’s next steps.
TD Securities’ alarming warning about a potential “silversqueeze” has captured market attention, with analyst Daniel Ghali highlighting that LBMA silver stockpiles could be depleted within seven months if current demand trends continue. The investment bank’s analysis reveals that London’s “free float” silver inventory has reached critically low levels of approximately 155 million ounces—enough to cover just six weeks of global demand. This supply constraint has manifested in dramatic market stress signals, including silver borrowing costs spiking above 5% for the fifth time this year, representing a 500% surge from historical near-zero levels. The supply squeeze has been exacerbated by U.S. tariff fears after silver received critical mineral designation, driving arbitrage opportunities as COMEX futures trade at 70 cents premium above London benchmarks. European refiners have shifted focus to gold bar recasting due to tariff confusion, while ETF holdings have grown 35-40% this year, further draining physical London stockpiles. Silver’s technical outlook remains bullish, with analysts targeting $42.85 as the next resistance level amid persistent Fed rate cut expectations and supply tightening.
