Silver prices surge to multi-year highs, posting intraday gains near 3.50%

• Silver prices break technical psychological resistance at $35.00, pushing prices to their highest level since February 2012.
• Interest rate expectations and the direction of the US Dollar help drive Silver prices.
• Safe-haven demand continues to rise as investors seek refuge against tariffs and trade uncertainty and softer US labour market conditions.

Silver (XAG/USD) surged sharply on Thursday, rallying nearly 4% intraday and reaching their highest level in more than a decade, as precious metals continue to attract investors amid escalating trade tensions and increased US Dollar outflows. 

A weakening US Dollar (USD) has made Silver more attractive for buyers, while intensifying trade tensions, rising tariffs, and broader economic uncertainty have reinforced the metal's appeal as a traditional safe-haven asset. 

After rising above $36, a level not seen since February 2012, the Relative Strength Index (RSI) surpassed 69. Although this is indicative of strong bullish momentum, it also serves as a potential warning that prices are nearing overbought territory.

Interest rate expectations provide an additional tailwind for Silver 

While the economic outlook remains uncertain, central banks are moving away from the restrictive monetary policies, which have caused interest rates to decrease throughout the year.

This has provided an additional boost for Silver prices, which do not yield any returns from holding the metal.

With the ECB announcing a 25 basis-point (bps) rate cut on Thursday, the US Federal Reserve (Fed) is facing pressure to lower rates in response to softening economic data, particularly in the US labour market.

On Thursday, US Initial Jobless Claims rose to 247,000 for the week, which was higher than last Thursday's 240,000 print and above analyst expectations of a 235,000 increase. As investors look ahead to Friday's Nonfarm Payrolls (NFP) figure, which will provide additional insight into the resiliency of the US labour market, these releases are crucial in shaping interest rate expectations for the Fed.