Silver Nears Record High on Bets of Fed Cut, Supply Tightness

GC=F -0.31% SI=F -1.82%

(Bloomberg) -- Silver traded near a record high as traders bet on further monetary easing by the Federal Reserve and supply tightness. Gold slipped.

Most Read from Bloomberg

• Steve Cohen, Bally’s, Genting Picked to Run Casinos in NYC

• Europe’s Largest Capital Without a Subway Is Finally Getting One

• Wealthy New Jersey Town’s Vote on Fixing School Deficit Canceled

The white metal whipsawed on Tuesday, slipping as much as 2.4% before rising 1.1% to approach the all-time high of $58.8434 hit the prior day. Silver is heading for its best annual performance since 1979, after having nearly doubled this year.

Traders raced to price in a potential dovish policy shift by the US central bank under a new chair backed by President Donald Trump. Bloomberg News reported last week that White House National Economic Council Director Kevin Hassett emerged as the frontrunner to succeed Jerome Powell at the helm of the central bank. Trump said Tuesday that he will announce the new chair “early next year.”

Traders are expecting a quarter-point rate reduction at the Fed’s Dec. 9-10 meeting. Lower rates typically benefit non-yielding precious metals including silver and gold.

Silver earlier was weighed down by investor profit-taking earlier as its recent price rally was seen as too fast, too far. Viewed through the 14-day relative strength index, a gauge of overbought conditions, silver tipped above 70, a level often seen as an indication that momentum is overheated.

The metal’s more-than-8% surge over the previous two sessions was fueled by wagers on prolonged supply tightness. Since record volumes of silver flowed into London in October to ease a historic squeeze, other trading hubs have come under pressure. Inventories linked to Shanghai Futures Exchange warehouses recently fell to their lowest in a decade.

“We have now moved on beyond rational momentum,” Daniel Ghali, senior commodity strategist at TD Securities, said in a note. “Demand expectations have declined across all categories, leaving investment demand as the primary driver today,” he said, citing weak physical trading in London’s over-the-counter market.

The gold-silver ratio — which shows how many ounces of silver are needed to buy an ounce of gold — has also dropped to the lowest in more than a year, another indication the rally may have run ahead of itself. Traders sometimes view such extremes as potential turning points.

Bullion has also been supported by rising expectations that the Federal Reserve will deliver another interest-rate cut next week.

Silver rose 1% to $58.56 an ounce as of 4:13 p.m. in New York. Gold fell 0.6% to $4,208.68. The Bloomberg Dollar Spot Index was little changed. Platinum fell, while palladium advanced.

--With assistance from Jack Ryan, Yihui Xie and Preeti Soni.

Most Read from Bloomberg Businessweek

• Creator of Hit Game Shovel Knight Is at a ‘Make or Break’ Moment

• The AI Industry Is Built on a Big Unproven Assumption

• Trump’s Assault on the WHO Is Forcing Radical Reform

• Pulte’s Move to Fix Credit Scores Is Bad News for Homebuyers

• Target Needs More Than a Vibe Shift to Turn Its Business Around

©2025 Bloomberg L.P.