(Bloomberg) — Silver pulled back from an all-time high, as traders took profits and a key measure of the dollar’s strength recovered. Gold edged down.
The white metal fell as much as 2.4% to $57.0935 an ounce, still within $2 of a record set in the previous session. Silver had risen for eight straight days through Wednesday, supported by speculative wagers linked to supply tightness and expectations for lower borrowing costs in the US – a tailwind for precious metals, which don’t pay interest.
Most Read from Bloomberg
The Bloomberg Dollar Spot Index, a gauge of the US currency’s strength, rose 0.1% after falling in the previous session. A stronger greenback generally makes it less affordable for most investors to buy metals.
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 led to 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.
Silver fell 1.8% to $57.4333 an ounce as of 2:53 p.m. in Singapore, having hit a record of $58.9789 on Wednesday. Gold was down 0.3% to $4,188.88 an ounce. Palladium and platinum both edged lower.