Rate cut is imminent, but silver drops first in anticipation?

Everyone in the market is watching the Fed’s move in December, and the probability of a 25 basis point rate cut has already shot above 90%. Logically, an easing expectation should be bullish for precious metals, but today silver isn’t following the script—spot prices dropped over 1%, plunging straight from recent highs.

This pullback isn’t hard to understand. Silver has already doubled this year, and with year-end approaching, institutions are busy locking in profits and closing their books, leading to a concentrated wave of profit-taking. Technically, it’s also been overbought. But don’t rush to go bearish just yet—the fundamentals are still tight: global inventories are at their lowest in a decade, and demand from the photovoltaic industry and AI computing centers continues to rise, with a supply-demand gap persisting for five consecutive years.

The key now is whether the $57 support level can hold. Before the FOMC meeting, prices will likely fluctuate around this area. As for whether this adjustment signals a trend reversal or a buying window, we’ll have to wait for the rate cut decision to be finalized and see which direction the capital flows. Short-term volatility is inevitable—just don’t get shaken out.