Silver pulls back after topping $80 in historic year-end rally

Silver retreated sharply after smashing through $80 an ounce for the first time, with traders taking profits from a record-breaking rally powered by a structural imbalance in supply and demand.

The white metal fell as much as 5% on Monday, after earlier spiking to a record $84 an ounce following five straight days of gains. A weaker dollar and escalating geopolitical tensions have added to the appeal of precious metals during an end-of-year jump to all-time highs for silver, gold and platinum. 

“Make no mistake: we are witnessing a generational bubble playing out in silver,” said Tony Sycamore, a market analyst at IG Australia.

Read More: Why Silver Has Been Surging Even More Than Gold

Silver’s rapid acceleration caps a yearlong rally for precious metals driven by elevated central-bank purchases, inflows to exchange-traded funds and three successive rate cuts by the US Federal Reserve. Lower borrowing costs are a tailwind for the commodities, which don’t pay interest, and traders are betting on more rate cuts in 2026.

In the last week, frictions in Venezuela — where the US has blockaded oil tankers — and strikes by Washington on Islamic State in Nigeria have added to the haven appeal of precious metals. The Bloomberg Dollar Spot Index, a key gaug...