The price of silver has surged past the $34 per ounce threshold, reaching heights not seen since late October. 

This upward movement comes as gold prices also experience a notable increase, suggesting a potential correlation between the two precious metals. 

Various factors could be contributing to this recent price surge, including economic uncertainty, geopolitical tensions, or a shift in investor sentiment towards safe-haven assets like precious metals.

The current value is only about one US dollar below the 12-year high that was reached approximately five months ago. This indicates that the current value is nearing a significant peak, suggesting a strong upward trend in recent months.

“This is likely to be reached soon given gold’s continuing rally,” Carsten Fritsch, commodity analyst at Commerzbank AG, said in a note. 

Silver price forecast

Given the evolving market dynamics and our latest analysis, Commerzbank have revised their price forecast for silver upwards. 

The German bank now anticipates that the price of silver will reach $35 per ounce by the end of the year. This is an increase from the bank’s previous forecast of $33 per ounce.

At the time of writing, the most-active contract of silver on COMEX was at $34.270 per ounce, down 1.7% from the previous close. 

Given the current market conditions and based on Commerzbank’s analysis, the bank anticipates that silver will appreciate in value relative to gold. 

This shift in the price dynamic between the two precious metals will result in a decrease in the gold/silver ratio. 

Fritsch projects that this ratio will decline to approximately 81. 

This figure aligns with the average gold/silver ratio observed over the preceding five years, and potentially indicates a return to a more historically typical relationship between the prices of these two precious metals, according to the German bank.

Gold’s rise

The recently weakened US dollar, which has lost all the gains it made since Donald Trump’s US election win in early November, has partially contributed to the rise in gold prices since late February.

“The influence of the US dollar on the gold price can also be seen from the fact that gold prices in other currencies such as the euro, pound sterling,” Fritsch said in a report. 

Furthermore, US equity markets have undergone a significant correction, falling below their early November levels. 

This has been accompanied by a marked decrease in US bond yields since mid-February and a rise in expectations for Federal Reserve rate cuts.

“This is because Trump’s erratic tariff policy and the announced layoffs of federal employees by the Department of Government Efficiency (DOGE) led by Trump adviser Elon Musk triggered great uncertainty, which led to a deterioration in sentiment among US companies and US consumers,” Fritsch added. 

“Even a US recession is no longer ruled out completely on the market.”

Inflation expectations

US import tariffs, both current and anticipated, have caused a significant increase in consumer inflation expectations.

Furthermore, US company purchasing managers reported a sharp increase in input prices, presenting the Fed with a dilemma.

The deteriorating economic outlook supports the case for additional interest rate cuts. However, mounting inflationary pressures suggest maintaining the current key interest rate.

It will therefore be interesting to see what Fed Chairman Powell has to say at the press conference after the Fed meeting on Wednesday.

“We expect fewer rate cuts than the market, which according to Fed Funds Futures currently expects 60 basis points of rate cuts by the end of the year,” according to Fritsch. However, as many as 75 basis points were even priced in last week.

Gold price forecast

Given the significant price increases and the high level of uncertainty, Commerzbank has also revised their mid-year gold price forecast upward to $3,000 per ounce from $2,700 an ounce previously.

“For the end of the year, we expect a gold price of USD 2,850 (previously USD 2,650),” Fritsch said. 

He added:

Should the Fed cut interest rates more strongly despite the increased inflation risks, the price of gold would continue to rise.

Meanwhile, the bank expects silver prices to continue getting support from rising industrial demand. These include photovoltaics and electromobility.

The Silver Institute reports that the silver market is expected to experience a substantial supply deficit this year. This follows four years of undersupply caused by record-high industrial demand.

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The US Federal Reserve maintained its benchmark interest rate on Wednesday but indicated that rate cuts are likely later this year, reflecting growing concerns over economic uncertainty, inflationary pressures, and the impact of tariffs.

The Federal Open Market Committee (FOMC) kept the federal funds rate within the 4.25%-4.5% range, unchanged since December.

Despite President Donald Trump’s aggressive trade policies and ongoing fiscal reforms, the Fed signaled it expects to implement two rate cuts in 2025 to support economic stability.

Federal Reserve’s outlook on rates and inflation

In its updated economic projections, the Fed acknowledged an increasingly uncertain economic outlook.

The FOMC statement noted that “uncertainty around the economic outlook has increased,” emphasizing the risks to both employment and inflation—its dual mandate.

The committee lowered its GDP growth forecast to 1.7% for 2025, down from the previous estimate of 2.1% in December.

Meanwhile, core inflation is now expected to rise at a 2.8% annual rate, up 0.3 percentage points from prior projections.

The Fed’s closely watched “dot plot,” which charts officials’ interest rate expectations, reflected a slightly more hawkish stance compared to December.

Four members now foresee no rate cuts in 2025, up from just one in the previous meeting.

Looking beyond 2025, the Fed projects two additional rate cuts in 2026 and one in 2027, with the long-term interest rate expected to stabilize at around 3%.

Fed slows balance sheet reduction but maintains mortgage-backed securities cap

In addition to holding interest rates steady, the central bank announced a slowdown in its balance sheet reduction process.

The Fed will now allow only $5 billion in maturing Treasury securities to roll off its balance sheet each month, significantly down from the previous $25 billion cap.

However, it maintained the $35 billion cap on mortgage-backed securities, a threshold that has rarely been reached since quantitative tightening (QT) began.

Fed Governor Christopher Waller was the sole dissenter in Wednesday’s decision, supporting the decision to hold rates but favoring the continuation of QT at its prior pace.

Tariffs, consumer sentiment, and labor market challenges

The Fed’s decision comes amid economic uncertainty fueled by President Trump’s trade policies.

His administration has imposed tariffs on steel, aluminum, and a range of imported goods, rattling global markets.

Another round of duties could be announced as early as April 2, adding further uncertainty to the economic outlook.

Consumer confidence has also taken a hit, with recent surveys indicating that inflation expectations have risen due to higher import costs.

While retail spending in February showed some resilience, it fell short of expectations, reflecting caution among consumers navigating an unpredictable economic landscape.

Stock market volatility and banking sector perspective

Since the start of Trump’s second term, stock markets have experienced heightened volatility, with major indices frequently dipping into correction territory.

Investors remain wary of an economic transition away from government-driven stimulus toward a more private sector-led approach.

Despite the uncertainty, some financial leaders remain optimistic.

Bank of America CEO Brian Moynihan stated that consumer spending, as reflected in card transaction data, remains solid.

BofA economists continue to project US GDP growth of around 2% in 2025.

Labor market cracks emerge

However, signs of economic strain are emerging in the labor market.

February’s nonfarm payrolls report showed weaker-than-expected job growth, while a broader measure of unemployment—including discouraged and underemployed workers—jumped 0.5 percentage points to its highest level since October 2021.

As the Fed navigates a complex economic landscape, its next moves will be closely watched by investors, businesses, and policymakers alike.

With interest rate cuts likely on the horizon, the central bank faces the challenge of balancing economic growth, inflation control, and financial stability in a shifting global environment.

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US stocks climbed on Wednesday after the Federal Reserve decided to keep interest rates unchanged, as investors assessed the potential economic impact of President Donald Trump’s tariff policies and the central bank’s outlook.

The Federal Reserve maintained its benchmark interest rate in the 4.25%-4.50% range, in line with expectations, and projected two quarter-point rate cuts later this year.

However, policymakers remained divided on the appropriate course of action, reflecting uncertainty over the economic impact of trade tensions and inflation trends.

The Fed also adjusted its balance sheet strategy, slowing the pace of its drawdown to manage liquidity concerns amid ongoing political debates over the US government’s borrowing limit.

The central bank’s economic projections pointed to slower growth and persistent inflation pressures.

“Given growing worries around tariffs and how they could affect US growth and inflation,” Matthias Scheiber, head of the multi-asset solutions team at Allspring Global Investments in London said the Fed “took a widely expected ‘wait and see’ approach on rates.”

“For 2025, the interest rate market currently expects the Fed will cut rates to around 3.75% by year-end. A lot will depend on how the inflation-versus-growth trade-off develops—growth may continue weakening, and the Fed may need to cut rates more forcefully than expected,” he added.

Dow Jones, S&P 500, Nasdaq Composite all gain

Following the Fed’s decision, stocks posted solid gains.

The Dow Jones Industrial Average rose 228.44 points, or 0.55%, to 41,808.20. The S&P 500 gained 46.76 points, or 0.82%, to 5,660.52, while the Nasdaq Composite added 213.23 points, or 1.18%, closing at 17,715.71.

Investors interpreted the Fed’s guidance as largely in line with expectations, despite lingering concerns about inflation and economic growth.

Traders now see a 62.2% chance of at least a 25-basis point rate cut in June, according to data from LSEG.

The yield on the US 10-year Treasury note declined slightly to around 4.28% after hovering at 4.32% before the Fed’s announcement.

Why did the market go up if economic projections were in line with expectations?

Some analysts suggested that fears of a more hawkish Fed had kept markets cautious ahead of the announcement.

Emily Roland, co-chief investment strategist at John Hancock Investment Management, noted, “There is a whiff of stagflation to this. You’re seeing the Fed revising down their estimates for growth and revising up modestly their expectations for inflation.”

Despite the broadly expected policy decision, markets rallied in part due to relief that the Fed did not signal a more aggressive stance on inflation.

“There were whispers of the Fed potentially removing one of the projected cuts due to inflation concerns. Even though the report was as expected, the fact that they didn’t take a more hawkish turn reassured investors,” Roland added.

Silver extends losses

Silver extended its losses, hovering around $33.60 per ounce after the Federal Reserve held interest rates steady at 4.25%-4.5% while signaling possible rate cuts of 0.5 percentage points by 2025.

Despite economic uncertainty stemming from President Trump’s tariffs and fiscal policies, silver remains close to a five-month high as concerns over trade tensions escalate.

Lease rates have surged due to shrinking stockpiles, particularly in London, as silver shipments shift to the US to take advantage of higher prices.

This trend has widened price disparities across key markets, with spot silver rising 17% this year, outpacing most other commodities.

Meanwhile, physical silver transfers—especially from Canada and Mexico—face increasing pressure from tariffs, tightening supply further. Growing fears of a “silver squeeze” could disrupt trade flows for months to come.

Boeing shares jump

Boeing’s stock price rose 6% on Wednesday following CFO Brian West’s announcement that the company’s cash burn was slowing and production was improving.

West’s optimistic outlook for the struggling company, whose shares fell over 32% last year, provided a positive counterpoint.

He also downplayed immediate concerns related to President Donald Trump’s tariffs but warned that the ultimate impact would depend on the duration of the uncertainty surrounding international trade policy.

“We think we’re off to a good start for the year,” West said at a Bank of America investor conference.

Turkish stock ETF plunges after Erdogan rival’s arrest

An exchange-traded fund (ETF) that tracks Turkish stocks experienced a sharp decline on Wednesday following the arrest of President Recep Tayyip Erdogan’s political opponent, Ekrem Imamoglu.

The iShares MSCI Turkey ETF (TUR) experienced a significant decline, with shares falling 11.4%. 

This decrease puts the ETF on track for its most substantial loss since December 17, 2021, when it dropped by 14%.

Williams-Sonoma slips

Williams-Sonoma’s stock price fell in morning trading on Wednesday, following the release of their underwhelming guidance for the upcoming year.

At the time of writing, the stock was down 5.9% from the previous close. 

At one point, Williams-Sonoma’s share price fell 11% after the home furnishings retailer forecasted a potential decline in net revenue for the upcoming fiscal year ending in January 2026. 

The company anticipates revenue to either remain flat or decrease by up to 1.5% compared to the previous year, attributing this projection to the fiscal year consisting of 52 weeks rather than the 53 weeks of the prior year.

The company admitted to $49 million in accounting adjustments due to overstated freight expenses in previous years.

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Burger King UK, the main operator of the fast-food chain’s British business, is set to begin discussions with lenders for a major refinancing deal nearly eight years after it was acquired by private equity firm Bridgepoint, according to a report by Sky News.

The company is looking to secure an additional £40 million in borrowing capacity to fund its long-term business strategy, which includes expanding its store network and upgrading existing locations, the report said.

The refinancing effort also involves £110 million of existing debt, with negotiations expected to take place in the coming days.

Investment bank DC Advisory is advising Burger King UK and Bridgepoint on the process.

Bridgepoint has already committed £35 million in fresh equity to support the company’s growth plans.

While the fast-food operator has previously been linked to a potential sale or a stock market listing, sources indicated that Bridgepoint has no immediate plans to exit its investment.

Expansion and sales growth fuel funding needs

Burger King UK, which directly owns over half of the nearly 600 Burger King outlets in Britain, intends to use the refinancing package to accelerate expansion.

The company plans to open more than 30 new restaurants while remodeling 50 existing locations to enhance customer experience and operational efficiency.

According to sources close to the business, Burger King UK has been outperforming the broader Quick-Service Restaurant (QSR) sector in like-for-like sales growth.

The introduction of its Gourmet Kings range has helped boost sales of higher-margin items, appealing to customers willing to spend more on premium fast food.

Meanwhile, its value platform has continued to attract budget-conscious consumers amid ongoing economic pressures.

The company has also leveraged promotional campaigns to drive engagement and sales.

A recent initiative, Whopper Day, saw the chain offer free burgers to customers who downloaded the Burger King app, further increasing brand interaction and digital engagement.

Financial performance remains strong

Burger King UK has demonstrated strong financial performance, with its most recent accounts revealing a return to profitability.

In August last year, the company reported a 30% surge in total revenues to £381.8 million for 2023, compared to the previous year.

CEO Alasdair Murdoch highlighted the company’s continued resilience in a challenging economic environment.

“We have seen a resilient trading performance in the first half of 2024, with total sales growth of 5% split equally between the existing estate and contribution from new site openings,” he said.

With a workforce of approximately 6,000 employees, the company remains committed to expanding its footprint.

Management has indicated that a strong pipeline of new restaurant locations is in place, with further growth expected in the coming years.

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China’s central bank kept its key lending rates unchanged on Thursday as policymakers balanced the need to support economic growth while maintaining currency stability amid rising trade tensions.

The People’s Bank of China (PBOC) left the one-year loan prime rate (LPR) at 3.1% and the five-year LPR at 3.6%, unchanged since an October cut of 25 basis points.

The decision followed the US Federal Reserve’s move to hold benchmark interest rates steady, though Fed officials signalled the possibility of half a percentage point in cuts through 2025.

The Federal Reserve maintained its benchmark interest rate in the 4.25%-4.50% range, in line with expectations. US stocks climbed on Wednesday after the decision.

The LPRs, which serve as benchmarks for corporate and household loans, are set monthly based on rates submitted by designated commercial lenders.

While the one-year LPR influences business and personal loans, the five-year rate is a key reference for mortgage rates.

China’s trade concerns

The PBOC has also maintained its seven-day reverse repo rate, the country’s main policy rate, at 1.5% since October, as it seeks to prevent excessive yuan depreciation.

The Chinese offshore yuan has recovered some ground since hitting a 16-month low in January but remains nearly 1.8% weaker since US President Donald Trump’s election victory in November.

Following the rate decision, the yuan remained steady at 7.2280 per US dollar, while the yield on China’s 10-year government bonds fell by more than two basis points to 1.932%.

Chinese authorities have pledged to increase monetary easing this year, including potential rate cuts “at an appropriate time,” to support an ambitious economic growth target of around 5%.

However, analysts suggest that any major policy measures from the PBOC will likely depend on Trump’s trade policy actions.

Impact of Trump tariffs on China’s economy

President Trump recently imposed new 20% tariffs on Chinese imports and has threatened further levies in early April.

The move adds pressure to China’s export sector, which has been one of the few bright spots in an otherwise slowing economy.

Beijing has responded with countermeasures, imposing tariffs of up to 15% on US agricultural exports and expanding restrictions on American businesses.

In February, China’s Finance Ministry also announced 15% tariffs on US coal and liquefied natural gas imports, along with 10% duties on crude oil, agricultural equipment, and certain vehicles.

China’s export growth slowed more than expected at the start of the year, while imports also declined, reflecting weak domestic demand and the ongoing strain of US trade restrictions.

PBOC Governor Pan Gongsheng has emphasized the importance of keeping the yuan stable at a “reasonable and balanced level,” a stance that could be seen as a goodwill gesture ahead of potential trade negotiations with Washington.

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