Silver reached $51.235 an ounce on Thursday — the highest in more than four decades — before paring gains.
Gold retreated further below $4,000 an ounce on signs a breakneck rally that took it to a record high may have been overdone, while silver rose to near the highest since 1980.
Bullion traded near $3,963 an ounce on Friday, after losing 1.6 per cent in the previous session. Technical gauges show the precious metal has been in overbought territory for much of the past month, prompting some investors to lock in gains after a rapid four-day winning streak that pushed prices to a record high of $4,059.31 an ounce on Wednesday.
“The strong momentum that had delivered new highs day after day gave way, with some traders keen to reduce exposure from extended positions and lock in performance,” Chris Weston, head of research at Pepperstone Group Ltd, said in a note.
Silver reached $51.235 an ounce on Thursday — the highest in more than four decades — before paring gains. The metal is still up about 70 per cent this year, easily outpacing gold’s advance. The rally is part of a broadening interest in precious metals, fuelled by fears of an overheating equities market, fiscal pressures in the US and threats to the Federal Reserve’s independence.
Gold’s selloff on Thursday coincided with a slide in US equities. While bullion is often viewed as a haven during market turmoil, it can drop alongside risk assets when investors liquidate positions to cover losses elsewhere. Nevertheless, bullion is still on track for an eighth weekly advance.
Precious metals have gained momentum as part of the so-called “debasement trade”, in which investors flock to the perceived safety of Bitcoin, gold and silver while pulling away from major currencies like the dollar. Concerns the value of financial securities will be eroded by inflation and unsustainable fiscal deficits are boosting their appeal.
Spot gold dropped 0.4 per cent to $3,963.09 an ounce at 8:42 a.m. in Singapore. The Bloomberg Dollar Spot Index dipped 0.1 per cent, after rising to a 10-week high in the previous session. Silver advanced 2.4 per cent, while platinum and palladium declined.
Silver often moves in tandem with gold, sharing its strong negative correlation with the US dollar and Fed interest rates. But the metal also has industrial applications in solar panels and wind turbines, which collectively account for more than half of all silver sold. Demand is set to exceed supply for the fifth consecutive year in 2025.
The silver market in London has now tightened to an almost unprecedented degree, resulting in sky-high borrowing costs. This year, fears that the US could levy tariffs on silver have spurred a dash to ship the metal to that nation, drawing down inventories in London and reducing the amount of material available to borrow. The implied one-month lease rate, which reflects the cost of borrowing the metal for a short period, surged even higher to unprecedented level on Friday.
An impassioned following helped drive sharp rallies in silver in 2011 and 2020, when it surged 140 per cent in less than five months. Over the following year Redditors jumped on board, while #silversqueeze rapidly gained momentum on social media.
In 1980, it was the Hunt brothers, Texan oil billionaires and notorious speculators, whose fear of inflation and belief in the metal as a store of wealth prompted them to try to corner the global market. They stockpiled more than 200 million ounces, driving the price above $50 an ounce before it crashed below $11.
That makes silver one of only a small handful of markets whose record highs from the commodity spikes of the 1970s and 1980s have yet to be surpassed. In inflation-adjusted terms, silver’s new high is only worth approximately one quarter of its 1980 peak.
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Published on October 11, 2025