Latest Developments in Gold, Silver, and Crude Oil: Silver Hits Record High, Oil Prices Find Direction Amid Volatility

The commodities market has been quite lively lately! The trends of the "big three" – gold, silver, and crude oil – are diverging: silver is soaring to new highs, crude oil is fluctuating between gains and losses, and gold is quietly adjusting in response to Federal Reserve policies. Today, let’s talk about the latest situation in plain language~

First, let's discuss the most eye-catching "star" – silver! In recent days, silver prices have been on fire, with spot prices once surging to $60.79 per ounce, and futures reaching $61.029, continuously hitting new highs. Why so fierce? The core reasons are twofold: First, everyone is betting on the Fed cutting rates. Although this recent 25 basis point cut was accompanied by a hawkish signal from Powell, the market still expects continued easing next year. Low interest rates naturally favor precious metals; second, silver spot inventories have been tight. In October, the London market experienced a historic supply crunch. Coupled with rising industrial demand, and the U.S. listing silver as a critical mineral, multiple positive factors have pushed prices to new heights.

Next, looking at gold, it appears much more stable, even a bit "tied up." The Fed cut rates as scheduled by 25 basis points on Wednesday — the third rate cut this year. However, Powell said rates are now in a neutral zone, and only one rate cut is expected next year. This raised concerns among investors about the smaller-than-expected subsequent cuts, causing some to reduce their holdings and leading to a slight decline in gold prices. Gold futures in New York closed at $4,224.7 per ounce, down 0.27%. But there's no need to panic; gold’s safe-haven properties remain intact. Moreover, market expectations of further rate cuts by the Fed next year haven't entirely disappeared. The market is likely to see continued high-level fluctuations, waiting for new policy signals and inflation data to guide the direction.

Finally, let’s talk about the elusive crude oil. A few days ago, oil prices dropped for two consecutive days on concerns over oversupply, with WTI crude falling to around $58 per barrel, mainly due to weakening demand for refined products and U.S. crude production hitting a record average of 13.61 million barrels per day. Many worry that oversupply will worsen. However, Wednesday brought a reversal: after the rate cut, the market expects a rebound in the real economy to boost oil demand. U.S. commercial crude inventories decreased by 1.812 million barrels week-over-week, though the decline didn’t meet expectations, it still provided some support to prices. WTI and Brent crude both edged higher, ending at $58.46 and $62.21 respectively. In the long run, the pressure on the oil market remains, as OPEC+’s production cuts are becoming less effective, U.S. shale oil continues to increase, and global oil oversupply could reach 4.09 million barrels per day next year. For prices to truly strengthen, a substantial improvement in supply-demand fundamentals is needed.

Overall, the core logic of the commodities market still revolves around Fed policies and supply-demand fundamentals. Most analysts predict that precious metals will likely continue their upward trend into 2026, while crude oil needs more fundamental support to clarify its direction. Whether investing or just watching the market, it’s crucial to pay attention to reports from the International Energy Agency and OPEC, U.S. economic data, and subsequent Fed statements, as these could all be "triggers" for market movements. Which type of asset do you think will perform better in the future?