Financial Analyst/Content Writer, RADEX MARKETS
Lawrence J. came from a strong technical and engineering background before pivoting into a more financial role later on in his career. Always interested in international finance, Lawrence is experienced in both traditional markets as well as the emerging crypto markets. He now serves as the financial writer for RADEX MARKETS.
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It was a record-breaking day for silver last Friday, with prices increasing a staggering 5.6% to reach $56.37 by the weekly close, surpassing the previous all-time high established back in October. The white metal climbed even higher this morning, coming within touching distance of $58 per ounce early in the Asian session. It is hard to believe without looking at the charts, but silver has almost doubled since the start of the year. Precious metals in general had a whale of a time on Friday, with gold, platinum, palladium, and even copper putting in strong performances. While speculation has certainly done its part to raise the tide for precious metals, silver prices have enjoyed the additional quirk of being subject to supply concerns. The previous record high coincided with a supply shock in the London vaults, while the current push is happening alongside a drought in Chinese warehouses. Beyond the obvious supply problems, silver is also facing the possibility of being affected by tariffs, after the US Geological Survey listed the metal as a critical mineral last month.
As if that were not enough, a perfect storm emerged last Friday when a data centre supporting the Chicago Mercantile Exchange (CME) suffered a disastrous ten-hour outage due to overheating. The exchange handles everything from stock indices to currencies, bonds, oil futures, interest rates, and of course, precious metals. The disruption affected markets worldwide and left brokers without up-to-date quotes. Prices across many assets remained frozen for several hours, leading to temporarily illiquid market conditions, which were already on the thinner side due to reduced Thanksgiving trading hours. While the exact cause of the data centre failure remains unclear, the CME is now once again fully operational and trading has resumed as normal.
The euphoria in silver is in sharp contrast to the despair in cryptocurrencies. Only a few hours into the week and Bitcoin is already 5% in the red, with prices plummeting to $85,000 as of this morning. The rest of the crypto market is faring as one would expect. A poor October led to an atrocious November, which has now opened the door to a dreadful start to December. The move was caused by a large wave of liquidations, with long positions worth over half a billion dollars being wiped out over the past 24 hours. Rough times.
Jerome Powell is set to speak late tonight, in what will be the Federal Reserve Chairman’s final comments before the December 10th meeting. Interest rate traders are now looking at an 87% chance of a rate cut next week, at least according to FedWatch. Although Powell’s tenure will not end until May, President Trump has apparently already decided on his replacement, although the decision has not yet been made public. A number of data points will help steer the Fed this week; the first on Wednesday, in the form of the latest ADP employment change; the second on Friday, in the form of the latest PCE price index. Unfortunately, the PCE figures only track the changes recorded in September, so the usefulness of such information is debatable. The government shutdown may be over, but the backlog will take a while longer to clear. Speaking of which, markets will not get an NFP drop on Friday, despite it being the first of the month. Traders will instead have to wait for Tuesday the 16th of December, according to a post from the BLS. All-in-all, not much to grab attentions this week, although the fallout from the CME outage last Friday may prompt a measure of volatility later today.
Risk Warning : Trading derivatives and leveraged products carries a high level of risk.
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