Silver Extends Its Advance amid Widening Budget Deficit and Weak Data

Written by Samer Hasn, Senior Market Analyst at XS.com

Silver rose by nearly 1% to the highest level in a week, moving beyond 52 dollars per ounce and marking a third consecutive day of gains.

Sliver’s advance appears driven by a renewed bid for safety as investors respond to the widening federal deficit and weak U.S. data that have reinforced expectations for a December rate cut.

Silver’s climb accelerated after a string of subdued economic indicators signaled that the consumer sentiment is declining further. U.S. retail sales missed expectations, and the Conference Board’s Consumer Confidence Index dropped sharply to 88.7 in November, its lowest reading since May. Producer Pirce Index (PPI) inflation readings were modest too, giving no headwind to rate cut hopes.

These data points collectively strengthen the case that further monetary easing has become more likely and that growth risks are re-entering the macro conversation. Besides, reports that Kevin Hassett, a figure known for favouring lower policy rates, is being considered for the Fed chairmanship added another dovish tilt.

With these, rate expectations shifted quickly in response. Markets now price an 84% probability of a 25 bp Federal Reserve cut next month, according to the CME FedWatch Tool, rising from below 40 percent a week earlier.

On the public finance front, the fiscal dynamics are amplifying this trend. The U.S. federal budget balance widened to a deficit of 284.4 billion dollars in October from 198.0 billion dollars in September. Such persistent fiscal slippage typically supports demand for safe assets and weakening the dollar, particularly when paired with weakening growth data and a potential policy shift.

The market is interpreting these crosscurrents as a signal that defensive hedging is becoming more attractive at a time when monetary and fiscal trajectories appear increasingly aligned toward easing.

Silver’s technical and fundamental posture now reflects a market preparing for a softer macro environment. While economic concerns are rising, they are simultaneously reinforcing the expectation of a December cut, giving silver a dual boost from risk aversion and policy repricing. This alignment explains the metal’s resilience and its capacity to maintain upward momentum even as broader markets remain cautious.