Gold dips after Fed’s divided rate cut causes uncertainty on future easing. Silver hits record 62.88/oz, driven by industrial demand from EV/AI sectors.
The precious metals market is a study in contrasts today. That happened. The US Federal Reserve delivered the expected 25-basis-point rate cut on Wednesday. And then, gold dipped while silver absolutely exploded to a new record high.
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Gold’s Halt: Divided Fed Creates Doubt
Spot gold is easing today, pulling back from a near one-week peak to trade around 4,221.49 per ounce.
The Problem: The rate cut itself was priced in, or nothing. The market’s real problem is the message that came with it. The Fed was divided on the vote, and Fed Chair Jerome Powell declined to offer clear guidance on the timing of future cuts.
Analyst Take: KCM Trade’s Tim Waterer said it clearly: “Gold has been unable to kick on… because the Fed’s message was essentially that any further rate cuts could be few and far between.”
The Vibe: Lower interest rates are usually bullish for non-yielding assets like gold. But the uncertainty about the pace of future easing has put a massive cap on gold’s upside for now. Investors are waiting for the next round of US jobs and inflation data to give a clearer path.
Silver’s Historic Rally: Not About the Fed
Silver, however, is on a completely different planet. It surged to a new record high of 62.88 per ounce earlier in the session and is currently trading around 62.25. The thing is, silver hasn’t really paid attention to the Fed’s messaging; it’s being driven by its own strong fundamentals.
What’s driving the silver frenzy?
Industrial Demand: This is the key. Silver is an industrial metal, not just a precious one. Demand is soaring from critical tech sectors like solar panels, electric vehicles (EVs), and AI data centers due to its superior conductivity.
Supply Shortage: Global supply is tight, and there’s a structural deficit. Most silver is a byproduct of mining other metals, which makes increasing output difficult.
Policy & Investment: Its recent addition to the U.S. critical minerals list and massive investment inflows into silver ETFs (Exchange Traded Funds) are adding fuel to the fire.
Ilya Spivak of Tastylive said silver has been “rallying all by itself” and the next significant level is likely on its approach to 64. It’s already up a stunning 113% year-to-date.
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