Silver hit $51,235 an ounce on Thursday – the highest level in more than four decades – before gains fell.
Gold fell further below $4,000 an ounce after signs a breakneck rally that took it to a record high may have been overdone, while silver rose to near its highest level since 1980.
Bullion was trading around $3,963 an ounce on Friday, after losing 1.6 percent in the previous session. Technical gauges show the precious metal has been in overbought territory over 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 eager to reduce exposure to extended positions and hold on to performance,” Chris Weston, head of research at Pepperstone Group Ltd, said in a note.
Silver hit $51,235 an ounce on Thursday – the highest level in more than four decades – before gains fell. The metal is still up about 70 percent this year, easily outpacing gold’s advance. The rally is part of a growing interest in precious metals, fueled by fears of an overheating stock market, US budget pressures and threats to the independence of the Federal Reserve.
Gold’s sell-off on Thursday coincided with a decline in US stocks. While precious metals are often seen as a refuge during market turmoil, they can fall in value along with risky investments as investors liquidate positions to cover losses elsewhere. Nevertheless, bullion is still on track for an eighth weekly advance.
Precious metals have been gaining momentum as part of the so-called “debasement trade,” with investors flocking to the perceived safety of Bitcoin, gold and silver while retreating from major currencies like the dollar. Concerns that the value of financial securities will be eroded by inflation and unsustainable budget deficits increase their appeal.
Spot gold fell 0.4 percent to $3,963.09 an ounce as of 8:42 a.m. in Singapore. The Bloomberg Dollar Spot Index fell 0.1 percent after rising to a 10-week high in the previous session. Silver rose 2.4 percent, while platinum and palladium fell.
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 together account for more than half of all silver sold. In 2025, demand is expected to exceed supply for the fifth consecutive year.
The silver market in London has now tightened to an almost unprecedented degree, leading to skyrocketing financing costs. This year, fears that the U.S. could impose tariffs on silver have led to the metal being shipped to that country, shrinking 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, rose even further to an unprecedented level on Friday.
A passionate following fueled sharp rallies in silver in 2011 and 2020, when silver prices rose 140 percent in less than five months. The following year, Redditors jumped on board, as #silversqueeze quickly gained traction on social media.
In 1980, it was the Hunt brothers, Texas oil billionaires and notorious speculators, whose fear of inflation and belief in the metal as a store of wealth drove them to try to control the world market. They had stockpiled more than 200 million ounces, pushing the price above $50 an ounce before falling below $11.
That makes silver one of the few markets that has yet to surpass the all-time highs of the commodity booms of the 1970s and 1980s. In inflation-adjusted terms, silver’s new high is only worth about a quarter of its 1980 peak.
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Published on October 11, 2025
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