Expectations of Federal Reserve interest rate cuts are heating up, and silver and gold are expected to usher in a new round of upward momentum.

Recently, two major developments have injected new vitality into the precious metals market. On one hand, the dovish faction within the Federal Reserve has gathered strength, leading to a significant increase in market expectations for a rate cut in December; on the other hand, AI-related policies continue to advance, further reinforcing market expectations for an accommodative monetary environment. Against this backdrop, both silver and gold have demonstrated strong upward momentum.

Federal Reserve Policy Shift, December Rate Cut Probability Soars to 83%

Last Monday, Federal Reserve Board member Waller reiterated support for a rate cut in December and pointed out that tariffs’ impact on inflation is temporary. Meanwhile, soft employment market data further strengthened market expectations for a rate cut. Based on current conditions, the three Fed governors appointed by Trump—Boman, Milan, and Waller—are all inclined to support a rate cut in December. Williams’ dovish signals last week suggest he will join the rate cut camp, and Cook also shows dovish tendencies.

This means the Fed decision-making body could form a scenario with five votes supporting a rate cut and six votes favoring maintaining current rates, with the final decision resting with Chair Powell. According to CME “FedWatch” data, the probability of implementing a 25 basis point cut in December has risen to 82.9%, a significant increase from earlier expectations of less than 40%.

AI Development and Policy Backing, Supporting Tech Investment Logic

On November 24, the Trump administration launched the “Genesis Plan,” aimed at driving scientific research innovation and accelerating scientific discoveries through artificial intelligence. This initiative reflects the U.S. government’s determination to prioritize AI as a strategic focus. As early as July, Trump issued the “U.S. Artificial Intelligence Action Plan,” designed to create a more favorable environment for AI companies. Additionally, the government is considering authorizing the export of NVIDIA’s H200 AI chips to China, providing policy support for industry leaders.

A series of measures further solidify the U.S. strategy of “betting heavily on AI.” However, the market also recognizes that current AI-related investments exhibit a phenomenon of “funds circulating only on paper without real implementation.” Tech giants like NVIDIA, Microsoft, OpenAI, and Oracle have built a high-debt-driven infrastructure boom cycle, which has also raised concerns about financial system stability risks.

Strong Performance of Precious Metals, Silver Leading Gold

Driven by rising expectations of Fed rate cuts, precious metals have rallied. Last Monday, silver rose by 2.71%, staying above the $50 level, while gold increased by 1.73%, regaining the 4100 USD mark. The 10-year U.S. Treasury yield fell back to 4.03%, approaching the 4% level again.

As the trend of declining real interest rates becomes established, liquidity conditions are becoming more accommodative, supporting both gold and silver. Compared to gold’s single monetary attribute, silver also has industrial uses, making its price drivers more diverse. With ongoing development of AI technology, the high energy consumption of data centers has raised concerns about the U.S. power grid, which will boost demand for energy-saving technologies and related materials. Meanwhile, the continuous expansion of emerging energy sectors, especially the photovoltaic industry, is expected to support overall industrial demand for silver.

Based on the above logic, silver is expected to benefit from a loose liquidity environment in the medium term, maintaining high levels or even reaching new highs. Relative to gold, silver is likely to outperform during periods of supply tightness. Gold prices are more likely to remain high and fluctuate within a range.

Silver Technical Analysis: Steady at $50, Targeting $56 Upwards

From the daily chart, silver’s upward trend since early April remains intact, currently holding above $50, demonstrating sustained bullish enthusiasm. If silver can consolidate support at $50, further rebound is possible, challenging resistance levels at $54 and even $56.5. The medium-term bullish/bearish dividing line for silver is set at $48.5.

Overall, improvements in policy environment and liquidity expectations provide a solid foundation for the rise of silver and gold. Investors should closely monitor the Fed’s December decision and subsequent economic data developments.