Spot Silver pulled back from a record high of $58.85/oz. on Tuesday, as investors likely took profits following the recent rally.
The pullback came after a six-session rally, which has pushed Silver prices up by more than 100% so far this year.
The white metal has been underpinned by rising expectations of an interest rate cut by the Federal Reserve this month amid ongoing supply tightness.
The latest macro data showed the US manufacturing sector activity had shrunk for the ninth straight month in November, which mounted more pressure on the Federal Reserve to lower interest rates.
Market players are now awaiting Fed Chair Jerome Powell’s remarks later today for more cues on the central bank’s policy path.
Fed Governor Christopher Waller said last week that the US job market was weak enough to warrant another 25 basis point rate cut in December.
Also, New York Fed President John Williams said that a near-term rate cut remained possible, with labor market weakness posing a higher risk than elevated inflation.
And, Kevin Hassett, seen as a frontrunner to succeed Jerome Powell, has echoed US President Trump’s support for rate cuts.
Markets are now pricing in about an 87.5% chance of a 25 basis point Fed rate cut in December, compared to an 84% chance a week earlier.
Markets are also pricing in three additional rate cuts by the end of 2026.
Lower interest rates tend to reduce the opportunity cost of holding Silver, which pays no interest.
Spot Silver was last down 0.99% on the day to trade at $57.43 per troy ounce.
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