Silver Nears Record as US Payrolls Reinforce Fed Rate-Cut Bets

SI=F +0.81% GC=F +0.91% DX-Y.NYB -0.35%

(Bloomberg) -- Silver traded near a record high after US payroll data reinforced bets that the Federal Reserve will cut interest rates in its final policy meeting of 2025. Gold extended gains.

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.

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Bond yields and the dollar pushed lower, helping silver rebounding from a decline of 1.6%. Swap traders continued pricing in a quarter-point rate reduction at the Fed’s Dec. 9-10 meeting. Precious metals including silver and gold typically benefit in a lower rate environment.

The white metal has been on a tear recently, in part due to expectations that the US central bank will deliver further monetary easing and that a new Fed chair will likely mirror President Donald Trump’s view favoring lower interest rates.

Silver has also been supported by a wave of speculative money betting on supply tightness. A record volume of the metal flowed into London last month, putting pressure on other hubs. Inventories in warehouses linked to the Shanghai Futures Exchange recently shrunk to the lowest in a decade.

Holdings by silver-backed exchange-traded funds rose by about 200 tons on Tuesday, according to Bloomberg calculations, underscoring enduring investor interest in the metal. That brought the total holdings to the highest since 2022.

“Fast-money traders love markets where pullbacks stay shallow because the physical side keeps tightening every dip,” said Ahmad Assiri, a strategist at Pepperstone Group Ltd.

Silver slipped to $58.32 an ounce as of 10:12 a.m. in New York, after hitting all-time high of $58.9789 an ounce earlier Wednesday. Gold rose .2% at $4,213.98 an ounce, after a two-day decline. Palladium and platinum both fell. The Bloomberg Dollar Spot Index lost 0.3%.

--With assistance from William Clowes, Yihui Xie and Preeti Soni.

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