Silver climbs as safe-haven demand, Fed rate cut bets drive gains

• Silver climbs above $49, benefiting from renewed safe-haven demand ahead of key US inflation data.
• Expectations of Federal Reserve interest rate cuts boost the appeal of the precious metal as the US Dollar weakens.
• The ongoing US government shutdown and US-China trade tensions maintain a risk-averse market mood.

Silver (XAG/USD) advances firmly on Thursday, trading around $49.20 per ounce at the time of writing, up 1.40% for the day. Investors are favoring safe-haven assets as markets remain cautious ahead of the September US Consumer Price Index (CPI) release finally scheduled for this Friday after being delayed due to the government shutdown. Political uncertainty, highlighted by the prolonged shutdown, continues to fuel demand for the grey metal.

The prospect of further monetary easing by the Federal Reserve (Fed) remains a key driver of Silver's rally. Markets now price in nearly a 97% chance of a 25-basis-point interest rate cut at the next policy meeting in October, according to the CME FedWatch tool. Lower rates reduce the opportunity cost of holding non-yielding assets such as Silver, enhancing its attractiveness.

On the international front, renewed trade tensions between the United States (US) and China have revived concerns over global growth. Washington is reportedly considering restrictions on software and technology exports to Beijing in response to China's latest curbs on rare earth exports. However, markets retain some optimism ahead of a meeting scheduled next week between US President Donald Trump and Chinese President Xi Jinping.

The combination of a more accommodative monetary outlook, persistent political uncertainty, and ongoing geopolitical risks continues to underpin the grey metal, which has gained more than 70% so far this year.