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The Fed backed itself into a corner and had to cut rates three times in the last four months of 2025.
Rate cuts are designed to stimulate growth — and they usually do at first. But they’re also fuel for inflation down the road.
Right now, I’m focused on what happens to silver during rate-cut cycles.
If you’ve watched precious metals since 2018, you’ve seen gold and silver move closely together. That alignment is familiar.
Silver typically lags early in the cycle, then outperforms once momentum builds.
In the 1970s super cycle, gold climbed 717% in 821 days. Silver didn’t just follow — it surged more than 1,000%, peaking at $50/oz in 1980.
That pattern repeated in the early 1990s. Silver more than doubled gold’s performance.
In 2008, silver delivered roughly 100% more return than gold during the run-up. From the 2008 lows to the 2011 highs, gold rose about 170%, while silver skyrocketed roughly 440%.
Following the COVID rate cuts, Silver crashed to about $12 in March 2020 and hit nearly $29 by August. That is a 140% gain in five months, comfortably doubling its value.
Across cycles, silver has often delivered 250% to 300% more return than gold during rate-cut environments.
Silver’s Track Record When Rates Get Cut
Let me walk you through why this pattern matters.
Time and again, silver has shown a tendency to lag early in a rate-cut cycle — then accelerate sharply once momentum builds.
During the 1970s rate-cut environment, silver climbed 334% in three years. After the mid-1970s cuts, it surged 725%, significantly outperforming gold.
The same dynamic showed up in later cycles. Silver’s gains consistently outpaced gold once liquidity expanded and inflation expectations rose.
That’s the behavior I’m watching for now.
What This Means for the Current Cycle
Here’s where it gets interesting.
Crude oil is already pushing above $65, adding pressure across commodities. When energy leads, precious metals often follow as inflation expectations rise.
That backdrop has historically favored silver.
Many analysts expect this rate-cut cycle could extend into 2027. That gives silver time — not weeks, but years — to build a sustained breakout if history repeats.
If this cycle follows a similar path, we may still be in the early innings.
Silver tends to move in explosive bursts after long quiet stretches — and time in the trade can be a major advantage.
I’m not saying silver is guaranteed to surge. Nothing in markets is certain.
But the setup is forming. The historical precedent is clear. And the catalyst is now in place.
Silver often trails gold early — then overtakes it later.
We may be standing at that inflection point right now.
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Geof Smith
Geof Smith TradingÂ
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*This is for informational and educational purposes only. There is inherent risk in trading, so trade at your own risk.Â
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