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Silver futures took a sharp dive today, with intraday declines approaching 6%. The gains from yesterday were so strong that today’s drop was equally fierce, essentially wiping out yesterday’s gains completely. Gold prices also didn’t fare much better, touching the $4,600 support level, but compared to silver, gold’s resilience is noticeably stronger, with far less volatility.
What’s behind this wave of correction? The most direct reason is the shift in the Federal Reserve’s rate cut expectations. Currently, the probability of a rate cut in January is only 5%, and the schedule for subsequent cuts has become increasingly uncertain. In this environment, silver naturally can’t sit still — it’s more sensitive to policy changes than gold. Conversely, gold’s relative stability is mainly supported by safe-haven demand driven by rising regional risks, and this support remains.
It’s quite normal for silver to experience this level of fluctuation before reaching the $100 mark. From the current situation, the driving force behind silver’s recent rally mainly comes from supply-side changes — as long as this fundamental doesn’t reverse, the upward momentum will be hard to break. Gold, on the other hand, is more influenced by regional tensions and inflation expectations.
Simply put, as long as these basic principles hold, opportunities for silver and gold still exist.