Silver Price Nears $55, Surpasses October Highs; MCX Rate Crosses Rs 1.66 Lakh

US spot silver price rose 2.5% to near $55 an ounce on Friday, thereby surpassing the record high it clocked in October.

The precious metal reached an intraday high of $54.75 per ounce so far. At 19:47 hours (IST), it was trading at $54.57, up 2.2% from the previous day's close.

Reflecting the rise in global prices, the rates jumped on India's Multi Commodity Exchange (MCX) as well, where silver futures were trading 2.5% higher at Rs 1.66 lakh per kilogram. This was close to the all-time high of Rs 1.7 lakh a kg recorded on the MCX last month.

In the US spot market, silver rose to an all-time high of $54.48 per ounce on Oct. 17. Since then, the prices began easing significantly, and the metal remained range-bound between $40-50 an ounce over the past month.

Notably, silver crossed the $40-mark on Oct. 9, as the metal's price rose sharply due to an unprecedented squeeze in physical silver supply. In India, the price also surged during the month due to massive festive season demand.

Silver exchange-traded-funds traded at hot-air premiums in October, rising by 5-10% each, as the precious metal's demand soared amid a global shortage. This had led to several mutual funds halting fresh inflows into their silver fund-of-funds, citing the sharp shortage in physical silver supply.

However, the frenzy around silver ETFs cooled in the third week of October, after global prices softened and the London Bullion Market Association projected an ease in the supply situation.

The fresh jump in silver prices comes amid increasing odds of a rate cut by the US Federal Reserve in December. Silver, similar to gold, gains strength in a low-interest environment. Both the metals are seen as hedge against inflation.

Gold prices remained upbeat on Friday, rising nearly 1% to $4,197.01 an ounce in the US spot market. On India's MCX, the yellow metal was trading 0.76% higher at Rs 1,26,453 per 10 gram at 20:28 hours (IST).