Silver Pulls Back After Setting Fresh All-Time High

 

Silver Pulls Back After Setting Fresh All-Time High

(Bullion News Network) – Volatility in the precious metals market continued on Friday. The spot price of silver pulled back by more than $1.55 per troy ounce, sliding to just over $62/ozt. The retraction came just one day after the metal set a fresh all-time high of $64.64/ozt following the Federal Reserve’s decision to cut interest rates for the third consecutive time on Wednesday. Gold gained nearly $20 per troy ounce to end the week, driving the gold-silver ratio more than two points higher to around 69.34:1. Platinum extended its lead over palladium, gaining nearly $50 per ounce to palladium’s $5/ozt.

On Wednesday, the Federal Open Market Committee voted to cut interest rates for the third time this year. The vote itself was contentious, with three separate dissents – the most dissenting FOMC voters since September 2019. Two voters, Austan D. Goolsbee and Jeffrey R. Schmid, voted to keep interest rates unchanged, while Trump-appointee Stephen I. Miran voted for a more aggressive 50 basis point cut. Precious metals soared on the news, with gold gaining more than $50/ozt and silver setting a brand new intraday high of $64.64 per troy ounce. The price action heavily favored silver, driving the gold-silver to a multi-year low of 67.32:1.

In the post-meeting press conference, Federal Reserve Chair Jerome Powell signaled that the FOMC’s position remains highly challenging, given the potential risks to both inflation and employment rates. When asked how the three dissents from Wednesday’s meeting play into his confidence moving forward, Powell had this to say:

If you look through the SEP, you’ll see that a very large number of participants agree that risks are to the upside for unemployment and to the upside for inflation. So what do you do? You’ve got one tool. You can’t do two things at once. So at what pace do you move? […] it’s a very challenging situation. I think we’re in a good place to — as I mentioned, to wait and see how the economy evolves.

Chair Powell also reiterated his belief that tariffs introduced throughout the year may be poised to make a more significant impact on inflation heading into 2026.

It’s really tariffs that’s causing the — most of the inflation overshoot. And we do think of those as likely to — in the current situation, as likely to be a one-time — you know, one-time price increase. Our job is to make sure that it is and we will do that job.

Markets largely anticipated that the Fed would vote to cut rates at its Dec. 10 meeting. At Powell’s September post-meeting press conference, the economist warned reporters that a rate cut in December was “far from” a foregone conclusion, injecting uncertainty into markets as traders attempted to predict the FOMC’s next move. Following a mixed-bag U.S. unemployment report and commentary from key voting members of the Federal Reserve in November, CME FedWatch’s projected probability of a December rate cut increased considerably.

Rate cut speculation played a major role in gold and silver price action throughout 2025, especially in the second half of the year. Cutting interest rates is generally considered an inflationary action, and safe haven assets like gold and silver tend to thrive during periods of falling rates and heightened inflation. 

Despite Friday’s pullback, 2025 has been an exceptionally strong year for silver. Silver prices increased by approximately 6.76% on the week of Dec. 12, 16.55% since one month prior, and a whopping 114.73% since Jan. 1 of 2025. The precious metal benefited from an ongoing supply deficit, as well as increasing industrial demand, particularly in the solar energy sector. In September, silver received another boost after China announced an ambitious plan to reduce carbon emissions by at least 10% by 2035. The plan is expected to significantly increase demand for silver in the country’s solar panel sector, which is already the largest in the world.

The gold-silver ratio ended the week in the 69.30-60.40:1 range after a bit more sliding toward the end of the trading day on Friday. The weekly GSR price chart showed considerable volatility, with silver’s Thursday run driving it to a multi-year low before Friday’s moderate recovery. The gold-silver ratio peaked at a yearly high of 104.78:1 on April 21 and has fallen relatively consistently throughout Q2 and Q3 of 2025.

Next week is slated to be a busy one for traders. On Tuesday, markets will have access to the delayed November U.S. employment report, which could have major implications for the Federal Reserve’s outlook heading into 2026. The final Consumer Price Index (CPI) of the year is due next Thursday. Given the FOMC’s ongoing concerns about the upside risks to inflation, this report could also play a significant role in the economic outlook to end 2025.