Silver prices rose in European trading on Wednesday, extending gains for a fourth consecutive session and continuing to shatter record levels, after breaking above the $90 per ounce threshold for the first time ever, supported by strong demand from retail investors and the current decline in the US dollar against a basket of currencies.

Headline inflation data released on Tuesday in Washington renewed hopes that the Federal Reserve could cut interest rates twice over the course of this year. To reassess these expectations, investors are awaiting the release of further key US economic data.

Price overview

• Silver prices today: silver prices jumped by 5.3% to $91.56, marking an all-time high, from an opening level of $86.94, while the session low was recorded at $86.84.

• At settlement on Tuesday, silver prices rose by 2.1%, recording a third consecutive daily gain, amid strong demand for precious metals as safe havens.

US dollar

The US dollar index fell by more than 0.1% on Wednesday, reflecting a decline in the US currency against a basket of global currencies, amid cautious conditions dominating foreign exchange trading.

Traders are paying close attention to the issue of Federal Reserve independence, following threats by the US Department of Justice to bring criminal charges against Chair Jerome Powell over alleged irregularities related to the central bank building renovation project.

In an unprecedented show of solidarity, global central bank officials issued a coordinated statement on Tuesday expressing full support for Powell and for protecting the independence of monetary decision-making in the United States.

These tensions come as markets await President Donald Trump’s announcement in the coming weeks of his nominee to succeed Powell, with Powell’s official term set to expire in May, increasing uncertainty across global financial markets.

US interest rates

• Core US consumer prices rose 0.2% month-on-month and 2.6% year-on-year in December, below analysts’ expectations of increases of 0.3% and 2.7%, respectively.

• US President Donald Trump welcomed the inflation figures and renewed his call for Federal Reserve Chair Jerome Powell to cut interest rates “meaningfully.”

• According to the CME FedWatch tool, the probability of keeping US interest rates unchanged at the January 2026 meeting is currently priced at 97%, while the probability of a 25-basis-point rate cut stands at 3%.

• Investors are currently pricing in two US rate cuts over the course of next year, while Federal Reserve projections point to a single 25-basis-point cut.

• To reprice these expectations, investors are later awaiting further key US data, including producer prices and retail sales for December.

Silver outlook

Brian Lan, managing director of Singapore-based trading firm GoldSilver Central, said that the next major round number for silver is $100, adding that large double-digit percentage gains for the metal look likely this year.

Gold prices rose in European trading on Wednesday, resuming gains that were briefly interrupted yesterday, to register a new record high, as they move toward testing the $4,700 per ounce level for the first time ever, supported by the current decline in the US dollar.

US President Donald Trump welcomed the inflation data and renewed his call for Federal Reserve Chair Jerome Powell to cut interest rates “meaningfully.” Markets are awaiting the release of further key US economic data later today.

Price overview

• Gold prices today: gold prices rose about 1.2% to $4,639.73, marking an all-time high, from an opening level of $4,586.33, while the session low was also recorded at $4,586.33.

• At settlement on Tuesday, the precious metal lost about 0.3%, marking its first loss in four sessions, due to corrective moves and profit-taking.

US dollar

The US dollar index fell by more than 0.1% on Wednesday, reflecting a decline in the US currency against a basket of global currencies, amid cautious conditions dominating foreign exchange trading.

Traders are paying close attention to the issue of Federal Reserve independence, following threats by the US Department of Justice to bring criminal charges against Chair Jerome Powell over alleged irregularities related to the central bank building renovation project.

In an unprecedented show of solidarity, global central bank officials issued a coordinated statement on Tuesday expressing full support for Powell and for protecting the independence of monetary decision-making in the United States.

These tensions come as markets await President Donald Trump’s announcement in the coming weeks of his nominee to succeed Powell, with Powell’s official term set to expire in May, increasing uncertainty across global financial markets.

US interest rates

• Core US consumer prices rose 0.2% month-on-month and 2.6% year-on-year in December, below analysts’ expectations of increases of 0.3% and 2.7%, respectively.

• US President Donald Trump welcomed the inflation figures and renewed his call for Federal Reserve Chair Jerome Powell to cut interest rates “meaningfully.”

• According to the CME FedWatch tool, the probability of keeping US interest rates unchanged at the January 2026 meeting is currently priced at 97%, while the probability of a 25-basis-point rate cut stands at 3%.

• Investors are currently pricing in two US rate cuts over the course of next year, while Federal Reserve projections point to a single 25-basis-point cut.

• To reprice these expectations, investors are later awaiting further key US data, including producer prices and retail sales for December.

Gold outlook

Brian Lan, managing director of Singapore-based trading firm GoldSilver Central, said that the data were positive, noting that inflation declined and the unemployment rate also fell in the United States, and that these indicators helped drive precious metals prices higher.

SPDR

Gold holdings at SPDR Gold Trust, the world’s largest gold-backed ETF, increased by about 3.43 metric tons on Tuesday, marking a second consecutive daily increase, bringing total holdings to 1,074.23 metric tons, the highest level since June 17, 2022.

The euro rose in European trading on Wednesday against a basket of global currencies, resuming recovery attempts against the US dollar, supported by relatively active buying from multi-week low levels, amid cautious conditions dominating foreign exchange markets.

Investors are closely monitoring dramatic developments surrounding the independence of the Federal Reserve, following the unprecedented move to open a criminal investigation into Fed Chair Jerome Powell.

Attention is now turning to a batch of US economic data due later today, which is expected to provide strong signals on the future path of interest rates over the course of this year, amid heightened uncertainty prevailing across global markets.

With inflationary pressures easing for policymakers at the European Central Bank, expectations have revived for at least one European interest rate cut this year. To reassess these expectations, investors are awaiting further key economic data from the euro area.

Price overview

• Euro exchange rate today: the euro rose 0.1% against the dollar to 1.1649, from an opening level of 1.1641, with a session low at 1.1636.

• The euro ended Tuesday’s session down 0.2% against the dollar, resuming losses that had paused the previous day during a recovery from a four-week low at 1.1618.

US dollar

The US dollar index fell about 0.1% on Wednesday, reflecting a pause in the recent rise of the US currency against a basket of major and minor currencies, amid cautious trading conditions in foreign exchange markets.

Traders are paying close attention to the issue of Federal Reserve independence, following threats by the US Department of Justice to bring criminal charges against Chair Jerome Powell over alleged irregularities related to a central bank building renovation project.

In an unprecedented show of solidarity, global central bank officials issued a coordinated statement on Tuesday expressing full support for Powell and for protecting the independence of monetary decision-making in the United States.

These tensions come as markets await an announcement by President Donald Trump in the coming weeks regarding his nominee to succeed Powell, with Powell’s term set to expire in May, adding to uncertainty in global financial markets.

Recent consumer price data released on Tuesday were seen as potentially giving the Federal Reserve more room to cut interest rates, as policymakers seek to balance concerns over persistent price pressures with signs of weakness in the labor market.

To reassess these expectations, investors are later awaiting key US economic data, including producer prices and retail sales for December.

European interest rates

• Data released last week showed a slowdown in headline inflation across Europe in December, pointing to easing inflationary pressures on the European Central Bank.

• Following these figures, money market pricing for a 25-basis-point rate cut by the ECB in February rose from 10% to 25%.

• Traders adjusted expectations from keeping rates unchanged throughout the year to anticipating at least one 25-basis-point cut.

• To further reprice these expectations, investors are awaiting additional euro area economic data on inflation, unemployment, and wages.

The Japanese yen declined in Asian trading on Wednesday against a basket of major and minor currencies, extending its losses for a seventh consecutive session against the US dollar and falling to an 18-month low. The currency is now on track to lose its grip above the 160 yen per dollar level for the first time since July 2024, amid growing concerns over calls for early elections in the world’s fourth-largest economy.

The yen is also under pressure from easing inflationary pressures on Bank of Japan policymakers, which has led to a decline in expectations for a Japanese interest rate hike later this month.

Price overview

• Japanese yen exchange rate today: the dollar rose 0.25% against the yen to 159.45, the highest level since July 2024, from an opening level of 159.06, with a session low at 159.06.

• The yen ended Tuesday’s trading down 0.6% against the dollar, marking its sixth consecutive daily loss, driven by recent political developments in Japan.

Early elections

Hirofumi Yoshimura, leader of the Japan Innovation Party and a partner in the ruling coalition, said on Sunday that Takaichi may call for an early general election.

Japan’s public broadcaster NHK reported on Monday that Prime Minister Sanae Takaichi is seriously considering dissolving the lower house and calling an early general election in February.

Kyodo News said on Tuesday that Takaichi informed ruling party leaders of her intention to dissolve the House of Representatives at the start of its regular session scheduled for January 23.

Yomiuri Shimbun reported on Wednesday that Takaichi is considering holding early lower house elections on February 8.

The move to dissolve the current parliament comes as Takaichi seeks to strengthen her popular mandate and secure a comfortable parliamentary majority to ensure the passage of the 2026 fiscal budget and proposed economic reforms, especially as the current government faces challenges pushing legislation through a divided parliament.

Views and analysis

• News of early elections has generated political uncertainty among investors, which was immediately reflected in movements in the Japanese yen in foreign exchange markets, amid anticipation of how the vote could affect future Bank of Japan decisions on raising interest rates.

• Eric Theoret, currency strategist at Scotiabank in Toronto, said early elections would give Takaichi an opportunity to capitalize on the strong popularity she has enjoyed since taking office last October.

• Theoret added that the implications for the yen are very negative, as Takaichi is seen as a supporter of accommodative monetary and fiscal policy, and would therefore be comfortable with looser fiscal policy and larger budget deficits.

Japanese interest rates

• Market pricing for the probability of the Bank of Japan raising interest rates by 25 basis points at its January meeting remains below 10%.

• The Bank of Japan will meet on January 22–23 to assess economic developments and determine the appropriate monetary tools for the current sensitive phase facing the world’s fourth-largest economy.