Interest-rate cuts have always been gold's moment. This cycle, silver could quietly steal the spotlight. As U.S. debt piles up and the cost of servicing it rises, markets are increasingly pricing a more accommodative Federal Reserve —regardless of sticky inflation. That shift, according to Ed Egilinsky, Managing Director and Head of Sales, Distribution & Alternatives at Direxion, could create an unusually powerful macro setup for silver.
- Track the silver-tracking SLV ETF here.
"The sizable U.S. debt load and the impact of higher rates on that debt could push the Fed toward further rate cuts," Egilinsky told Benzinga in an exclusive interview. "A lower-rate environment, especially under a newly appointed Fed chair later in the year, could be a tailwind for silver prices."
Muted Volatility, Rising Metals
What's striking is that precious metals have already rallied without a classic fear trigger. As Egilinsky pointed out, "the last two years where the VIX has been mostly muted, yet gold and silver have rallied sharply."
That breaks the traditional crisis-only narrative. Silver, in particular, is benefiting from a different kind of macro regime—one where policy easing and industrial demand coexist.
Silver's Dual Engine: Rates And Industry
Gold still dominates as the pure safe haven, backed by central bank buying and reserve asset status. Egilinsky describes it as having "more flight to safety aspect than its brethren Silver."
Silver, however, has a second growth lever: industrial demand. This is something silver has but gold doesn't: leverage to economic activity. Rate cuts don't just weaken the dollar — they support capital spending, infrastructure investment, and industrial demand.
Egilinsky points to structural drivers—semiconductors, data centers, solar, and electrification—as transformative sources of demand for silver. In a rate-cut environment that also supports capital spending and AI infrastructure, silver's industrial exposure becomes a feature, not a risk.
That dual role enables silver to rally even without a risk-off shock.
Volatility As A Feature, Not A Bug
"Historically, Silver has tended to be more volatile than Gold," Egilinsky noted, adding that the recent rally has already been accompanied by rising trading volumes. If global economic activity remains resilient and AI and energy spending persist, silver could outperform gold in the next phase of the cycle.
Investor Takeaway: This isn't just a cyclical spike. A debt-driven Fed pivot plus secular industrial demand creates a rare two-sided tailwind for silver. Gold thrives on fear. Silver thrives on policy easing and growth. In this cycle, that hybrid profile may be exactly what makes silver the accidental Fed trade.
Image: Shutterstock
