Silver Nears Record High on Bets of Fed Cut, Supply Tightness

Core Viewpoint - Silver has retreated from a record high due to overbought conditions, while gold has also seen a slight decline [1][2]. Group 1: Market Performance - Silver traded approximately $1.70 below its all-time high after a decline of up to 2.4% earlier in the session [2]. - As of 9:51 a.m. in London, silver fell 1.8% to $56.97 an ounce, while gold edged down 1% to $4,191.25 [7]. Group 2: Supply and Demand Dynamics - The recent surge of over 8% in silver prices was driven by expectations of prolonged supply tightness, with inventories linked to Shanghai Futures Exchange warehouses at their lowest in a decade [4]. - Demand expectations have declined across all categories, with investment demand becoming the primary driver for silver prices [5]. Group 3: Technical Indicators - The 14-day relative strength index indicated that silver briefly exceeded 70, suggesting that momentum may be overheated [2]. - The gold-silver ratio has dropped to its lowest in over a year, indicating that the recent rally may have outpaced sustainable growth [6]. Group 4: Interest Rate Expectations - Rising expectations for another interest-rate cut by the Federal Reserve have supported bullion prices, with markets anticipating a near-certainty of a quarter-point reduction at the Fed's final meeting of the year [7].