NEW DELHI, Dec 20 (Reuters): Silver soared to a record high on Friday, bolstered by investment demand and a supply tightness, while gold posted a weekly gain buoyed by increasing expectations of interest rate cuts by the US Federal Reserve.
Spot silver rose 2.6 per cent to $67.14 an ounce, ending the week 8.4 per cent higher after hitting a record high of $67.45 in the session.
Spot gold rose 0.4 per cent to $4,347.07 an ounce as of 02:17 p.m. ET (19:17 GMT), and logged a weekly gain of 1.1 per cent . US gold futures settled 0.5 per cent higher at $4,387.3.
"(Gold and silver) are highly correlated and typically gold leads but the last two months, we saw silver lead. So, whenever you see spread that wide, people will start to pick on gold and tighten on it in the short term," said Michael Matousek, head trader at US Global Investors.
Silver has soared 132 per cent this year, far outpacing gold's 65 per cent rise, driven by robust investment demand and supply constraints.
"ETF flows (in silver) continue to dominate that theme as well as some speculation from the retail investor," said Phillip Streible, chief market strategist at Blue Line Futures.
Macro data has further fueled optimism for rate cuts with US consumer prices rising 2.7 per cent year-on-year in November, falling short of economists' forecast of a 3.1 per cent increase.
Separately, the US Labor Department reported earlier this week that the unemployment rate rose to 4.6 per cent in November, the highest since September 2021.
"We've seen the lower inflation data, the weakening labor report. It really reaffirms that the Federal Reserve should keep on their easing path - that's one of the main drivers. Second is a lot of the uncertainty around what central bank policy is going to entail," Streible added.
Traders continued to bet on at least two 25-basis-point interest rate cuts next year from the Fed, according to LSEG data.
Platinum gained 3.1 per cent to $1,975.51 after touching a more than 17-year high on Thursday. Palladium was 0.8 per cent up at $1,709.75 after hitting a nearly three-year high earlier in the session.
