Silver extended its gains after breaking above $60 an ounce for the first time on Tuesday, as traders bet on further monetary easing by the Federal Reserve and continued supply shortages.
The white metal rose to a record high of $60.9213 an ounce on Wednesday, building on a 4.3% increase in the previous session.
Expectations that the US Federal Reserve would cut interest rates by a quarter point at the end of its meeting on December 9 and 10 have supported the rapid rise in silver prices in recent days. Low borrowing costs are a supporting factor for non-yielding precious metals.
Traders are also looking beyond the Fed's decision this week for clues about U.S. monetary policy next year. Kevin Hassett, President Donald Trump's frontrunner to succeed Jerome Powell as Fed chair, said on Tuesday that he sees considerable room for a significant interest rate cut.
Supply shortages and record market momentum
Silver has more than doubled this year, outpacing gold's 60% rise, with the rally gaining momentum since the historic supply shortage crisis in October.
Although this pressure has eased as more metal flows into London's vaults, borrowing costs remain high, indicating continued supply constraints. Other markets are also experiencing supply pressures, with Chinese inventories at their lowest level in a decade.
The rally was also supported by strong inflows into silver-backed exchange-traded funds (ETFs). Last week, money flowed into these funds at the fastest weekly pace since July, a strong indication that investors believe the rally is not over yet.
Traders are also seeking clarification on whether the United States will impose tariffs on silver, after the white metal was added last month to the country's list of critical metals.
This concern has led some traders to hold onto the metal within the local market, keeping inventories in Comex exchange warehouses near historically high levels despite their decline from the October peak.
Silver was up 0.1% at $60.7465 an ounce by 8:19 a.m. in Singapore. Gold was steady at $4,208.80 an ounce, while platinum and palladium saw little change. The Bloomberg Dollar Spot Index also held steady after closing 0.1% higher in the previous session.
