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Precious metals rebounded to multi-week and all-time highs as expectations of easing from the Federal Reserve rose, but cryptocurrency markets told a different story amid ETF flows and macroeconomic challenges.
The price of gold reached a six-week high on Monday, while silver hit a record high, supported by growing expectations for a US interest rate cut and a weaker dollar.
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Silver shines due to lack of supply
Spot gold rose to $4,241 an ounce, its highest level since late October, while silver rose to a record $58.83 before retreating slightly. The value of the white metal has doubled this year, clearly outstripping gold’s 60% increase.
The main driver of this recovery is the growing expectation for interest rate cuts by the Federal Reserve. According to CME FedWatch dataTraders are now pricing in an 87.6% chance of a rate of 25 basis points at the Fed meeting on December 10, with a 12.4% chance of rates remaining unchanged.
Contrary to the expectations of monetary policy, silver will benefit from severe supply restrictions. A historic contraction in London in October drew record amounts of the metal into the trading center, wiping out inventories elsewhere. Stock inventories linked to the Shanghai Futures Exchange recently hit their lowest levels in nearly a decade, while one-month borrowing costs for silver remain high.
still Industrial use Silver is growing, especially in electronics and renewable energy. The solar panel industry uses a large amount of silver, keeping demand high. With investment flows seeking protection from inflation, these factors pushed the price of silver higher.
The long-term record remains strong. In five years, prices have increased Silver For 135.79%, and over 20 years, it increased by 563.06%. This trend highlights recurring policy cycles and persistent industrial demand.
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The dollar’s decline to its lowest level in two weeks increased the attraction of precious metals for holders of other currencies. Dovish statements from Fed officials, including the governor Christopher Waller President of the Federal Reserve in New York John Williamsreinforced expectations for continued monetary easing.
Bitcoin breaks the usual trend
However, Bitcoin, often described as “digital gold”, has moved in the opposite direction. The main cryptocurrency fell to around 86,000, down about 30% from its October peak near 126,000.
Several factors seem to explain this discrepancy. Bitcoin funds listed in the United States recorded about $3.4 billion in net inflows in November, reversing previous inflows. Mention the security exposure of Financial rings The $9 million mark on Dec. 1 rattled decentralized financial sentiment, while hints from Bank of Japan Governor Kazuo Ueda about a possible interest rate hike raised fears that global financing arrangements are unraveling. In addition, more than $1 billion of leveraged positions in cryptocurrencies were liquidated during the recent sale.
While gold, silver and Bitcoin are non-performing assets, the precious metals benefit from independent bullish drivers – namely a lack of physical supply. Bitcoin, in contrast, remains more sensitive to ETF flows and deleveraging operations.
While rate cut expectations should be favorable for Bitcoin in the medium and long term, short-term headwinds currently have a major influence.
