Silver retreats from record high amid profit-taking
Silver retreated from an all-time high on Thursday as traders locked in profits, while gold remained largely unchanged.
The white metal dropped as much as 3.2% after hitting $58.9789 an ounce in the previous session, News.Az reports, citing Bloomberg.
Silver had surged for eight consecutive days through Wednesday, pushing the market into overbought territory, fueled by speculative bets on supply constraints and expectations of lower U.S. borrowing costs.
Lower interest rates generally support non-yielding precious metals. The Bloomberg Dollar Spot Index, which tracks the strength of the U.S. dollar, held steady after reaching its lowest level since late October. A weaker dollar typically makes metals more affordable for investors.
Though silver has whipsawed in recent days, the metal is on a tear. It has roughly doubled in value this year, outperforming a 60% rise in gold, and both are on track for their best annual performances since 1979. A historic silver squeeze in October fueled record flows of the metal into London, which then led to tightness elsewhere. Inventories linked to Shanghai Futures Exchange warehouses recently fell to their lowest in a decade.
Delayed US economic data has reinforced expectations that the Federal Reserve will cut interest rates at its final policy meeting of the year. US companies shed payrolls in November by the most since early 2023, according to ADP Research data released Wednesday, adding to concerns about a more pronounced weakening in the labor market. Swap traders are pricing in a near-certain quarter-point rate reduction at the Fed’s Dec. 9-10 meeting.
Traders are also watching closely for a potential tariff on silver in the US, after the metal was added last month to the US Geological Survey’s critical mineral list. The prospect of an American premium has already driven a large volume of silver into Comex warehouses, and liquidity is set to be constrained pending clarity on US tariff policy, Daniel Ghali, senior commodity strategist at TD Securities, said in a note.
Inflows to silver exchange-traded fund options, led by retail investors, are having “an outsized impact on prices amid this liquidity vacuum, creating a market structure favorable for a blow-off top,” Ghali said. The total volume of call and put options on the most popular physical silver ETF recently spiked to a level last seen during the October squeeze.
Spot silver fell 1.5% to $57.602 an ounce as of 11:37 a.m. in London, after the recent rally pushed its 14-day relative-strength index above a level that can suggest that prices have risen too fast. Gold was little changed at $4,201.23 an ounce. Platinum was down, while palladium was steady.
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