Daily Gold (XAU/USD)
Gold is telling the same story. Spot is grinding above its 50% retracement at $4,133.95, and traders have bid December cut odds to 85% — up from 50% just a week ago. That repricing accelerated after dovish signals from Fed Governor Waller and New York Fed President Williams, plus a string of softer U.S. data. Lower yields and a weaker dollar are textbook tailwinds for metals, and silver is running harder than gold because it always does when conviction builds.
The dollar is on pace for its worst week since late July, which makes bullion cheaper for foreign buyers and adds fuel to an already strong bid.
Industrial Demand Is the Structural Story
This is where silver separates from gold. Industrial fabrication is forecast to grow 3% this year, with volumes on track to surpass 700 million ounces for the first time. Solar is the engine — panels require 15–25 grams of silver each, and global installations keep hitting new highs. EVs pile on top, using up to 50 grams per vehicle as the sector scales.
Meanwhile, mine production has contracted at a 0.9% annual rate since 2020. Output is down roughly 7% since 2016, and the market is on track for its fifth consecutive annual deficit. That’s not a cyclical blip — it’s a structural squeeze. Physical users can’t afford to wait, which is why dips keep finding buyers.
China Tightens the Screws
The wild card this month came from China. Shanghai Futures Exchange stockpiles dropped to decade lows, and record October exports — more than 660 tons — drained domestic inventories to ease tightness in London. Shanghai flipped into backwardation, a textbook signal of near-term pressure. Tax changes nudged some retail demand toward silver, and the result is another layer of heat on an already tight global market.