Silver prices have big pumped to $41: Fed's interest rate cut expectations become the biggest driver.

During the Asian trading session on Wednesday, silver quietly approached the $41 mark, with buying pressure significantly increasing. This wave of rise is mainly driven by two factors: the continuous weakening of the dollar and the renewed tension in the Middle East. The market is currently holding its breath for the release of the US Producer Price Index ( PPI ) data, hoping to gain more clues from it.

The annual revision of the US non-farm payroll data shows that the actual number of employed people is 910,000 less than the preliminary statistics. This finding has shocked the market and revealed that the actual state of the US labor market is much weaker than the official data indicates. In this situation, the possibility of the Fed being forced to increase interest rate cuts has greatly increased. A decrease in interest rates will directly reduce the opportunity cost of holding silver, providing strong support for this non-yielding precious metal.

Meanwhile, the atmosphere in the Middle East is becoming increasingly tense. Bloomberg reports that Israel has launched attacks targeting Hamas leaders in Qatar's capital, Doha. Qatari officials have strongly condemned this action, stating that it violates international law and could trigger a broader conflict in the Middle East. This tension has prompted safe-haven funds to flow into the precious metals market.

The U.S. August PPI data, to be released later today, will become the focus of the market. Economists predict that the overall index will rise by 3.3% year-on-year, and the core PPI will increase by 3.5% year-on-year. If the data rises above expectations, it could boost the dollar in the short term, putting pressure on precious metal prices.

I personally believe that silver is currently in a golden period of multiple favorable factors stacking up. The Fed's interest rate cut expectations, geopolitical risks, and the growth of industrial demand all provide solid support for silver prices. However, there is always a risk of a pullback after a rapid rise in any asset, and investors need to remain vigilant, especially on the eve of key economic data releases.

Recently, after silver and gold jointly reached new highs, they experienced a significant correction. This volatility reflects the extreme sensitivity of market sentiment. Trump's sudden announcement of new tariffs on China further triggered turmoil in global markets, causing precious metals, crude oil, and cryptocurrencies to suffer heavy losses. This reminds us that even traditional safe-haven assets find it difficult to remain unscathed in the face of specific political events.