Silver Hits $64 Post Fed Rate Cut: What Triggered the Spike - And Why Gold Is Now Playing Catch-Up

Silver has just smashed through the $64/oz mark, extending one of the most explosive multi-week rallies seen in the metals market. Coming right after the US Federal Reserve’s 25 bps rate cut, the move has stunned traders, triggered massive short-covering, and reopened the age-old debate: Is silver the real bull-run leader?

Meanwhile, gold—hovering near $4,280/oz—is rising at a slower but steady pace, creating a rare divergence between the two precious metals.

Here’s what’s driving the action.

1. Fed Rate Cut = Liquidity Surge + Dollar Softness

The Fed cutting rates to 3.50–3.75% immediately weakened the dollar index and boosted expectations of faster global liquidity expansion in 2025.

Silver, being both a monetary metal and industrial metal, reacts much more aggressively than gold whenever:

• Bond yields fall

• Liquidity improves

• Market pricing shifts toward inflationary cycles

This is exactly what happened — silver outsprinted gold as the dollar slipped and yields cooled.

2. Industrial Demand Boom: EVs, Solar, Chips

Silver’s fundamentals today are far stronger than the last cycle.

We are in a structural demand expansion:

Solar panel manufacturing demand at all-time highs

EV component demand rising double digits

Semiconductor and battery tech needing more silver than ever

When monetary easing meets industrial growth, silver gets a dual-engine rally — gold doesn’t.

3. The Big Short Squeeze

For months, speculative traders were heavily short on silver, expecting a correction below $55.

But the Fed’s dovish tone flipped the narrative overnight.

The break above $60 triggered:

• Stop-loss hits

• Short unwinding

• Momentum algo buying

• Fresh long positions

This inorganic burst pushed silver above $64 in hours, a textbook short squeeze.

4. Gold Rising Slowly - Why the Lag?

Gold is currently near $4,280/oz, but it hasn’t shown the same vertical lift.

Reasons:

Gold is primarily a monetary metal

It reacts more gradually to:

1. Rate cuts

2. Inflation expectations

3. Dollar weakness

4. Geopolitical risk pricing

   Gold is in consolidation after massive 2024–25 rally

After hitting multiple record highs, gold is in a “slow grind” mode — not a breakout mode.

But historically, silver leads the early breakout and gold follows with a bigger, more stable uptrend.

This divergence is not abnormal it's a classic metals cycle pattern.

5. What Happens Next? Silver Lead → Gold Confirmation Move

Every time silver breaks out aggressively, gold follows with a delayed but powerful leg-up.

If silver sustains above $62–64, we can expect:

• Silver Targets

• Immediate: $66–68

• Medium-term: $72

Extreme breakout: $80+ (only if Fed cuts again + industrial demand stays hot)

• Gold Targets

• First hurdle: $4,320–4,350

• Breakout zone: $4,420+

2025 target range: $4,600–4,750

Silver is the sprinter.

Gold is the marathoner.

Should Traders Be Cautious? YES.

RSI on silver is above 80–90 in many timeframes — extremely overheated.

A violent intraday correction of 5–8% is possible at any time.

Gold, meanwhile, remains the safer asset from a volatility standpoint.

Final Takeaway

The post-Fed rally has confirmed one thing:

• The metals supercycle is not cooling it is accelerating.

• Silver is the high-beta play leading the charge.

• Gold is building energy for the next breakout.

If liquidity expands further, 2025 could be the strongest precious metals year since 2010.