Weekly column: Silver's blowoff move and the rhyme of the 1980 cycle

Review

 The fabled dot plots settled on one rate cut next year, and Fed Chair Powell described the current stance as being within a neutral range. The U.S. economy needs insurance against labor market downside risks. It does not need stimulus—especially with inflation risks as they are.

—Dr. Paul Donovan, UBS Morning Comment, www.ubs.com/ci, December 11, 2025.

 The Fed delivered the widely anticipated 0.25% rate cut on Wednesday, December 10, the same day Neptune (illusion/confusion/is this real?) returned to direct motion. The policy statement released afterward had a little bit of something for everyone. There was an acknowledgement of softening in the labor market, but also that inflation seems to still be as “sticky” as a half-eaten candy cane inadvertently left on your couch following family Christmas. With the dot plots mentioned by Mr. Donovan showing a preference for only one 0.25% rate cut in 2026, they seem to indicate where the majority of Fed voting members’ concerns lie. And why shouldn’t they be concerned about inflation expectations? Anyone who has actually tried to get that candy cane “unstuck” knows it’s nearly impossible!

However, not everyone is on the same page at the Fed, with three members dissenting to the 0.25% rate cut (two voted for no change in rates while one wanted a 0.50% cut). It was also announced that the Fed would start a round of RMPs (Reserve Management Purchases) in the amount of $40 billion starting this month. This is a quick turnaround from the Fed’s official end of “QT” on December 1 to already needing to grease the gears of the financial system. And yes, I am well aware of the arguments that RMPs are NOT “QE” …but aren’t they just a little bit? And if they are, what is the Fed worried about?

Whatever the reason, many markets liked the initial idea of a liquidity injection, with several financial and commodity markets rallying nicely last week before sharply reversing course on Friday. In the U.S., the Dow registered a new all-time high while the NASDAQ and S&P were close, but didn’t quite make it. The same could be said of other stock markets around the globe, with the DAX, SMI, and Nikkei all close to new all-time highs but with a little further to go. With the “Santa Claus” rally in full effect, the question is, will he feel generous enough to deliver these new highs into year-end? If not, then the bearish divergence that developed last week in U.S. stock indices could prove an ominous warning.

In commodities, the hot action was in the metals. Silver exploded higher, briefly trading above $65 an ounce, but then sold off sharply on Friday. Gold also had a nice run, getting close to its all-time high of $4398, hitting $4388 (double top?), before selling off sharply as well. Even Platinum registered a fresh new all-time high, but unlike the other metals, it held up reasonably well into the close. However, here too we have a case of bearish intermarket divergence now in effect between Gold and Silver. If Gold can’t exceed $4398 soon, this could become a troublesome sign. Perhaps the best performing commodity outside of Silver this week was Cocoa. It gained 14% on the week and has been up over 31% since forming a primary cycle low in November. This makes perfect sense, because even a kindergartener knows you can’t have a Santa Claus rally without “hot cocoa”! Conversely, the energy sector took it on the chin this week with Crude Oil hitting its lowest level since October and Natural Gas falling a whopping 22% from last week’s close.

In the currency markets, the Dollar got hammered after the rate decision but stabilized somewhat to close the week. This led to strength in other currencies, with the strongest being the Aussie and Canuck, which are known affectionately as the “commodity” currencies. For Cryptos, the rate cut and introduction of RMPs were pretty much a non-event, which should be worrisome if you are a Bitcoin bull right now.

Short-term geocosmics

We are in the midst of the final CRD of 2025, December 16-17 +/- 3 trading days. It is highlighted by Mars and Venus forming hard square aspects to Saturn and Neptune, which can give markets a tense, anxious, and even irrational type of quality. We saw this play out on Friday with outstanding daily and weekly gains being wiped out by sharp reversals. With bearish divergences in both the stock and metal markets now in effect, it will be critical to see those divergences negated in the coming weeks. Failing to do so could mean Santa might just be planning on filling those stockings with “coal” this year.

Longer-term thoughts

Saturn and Uranus have a synodic period of approximately 45 years, and we are currently in the central time band of Saturn in a waning sextile to Uranus (April 2025 to January 2026). If we look back 45 years, we see that the previous Saturn/Uranus waning sextile took place with the central time band occurring between September 1979 and July 1980. What is interesting is that in January 1980, Silver experienced a blowoff type move that culminated with Silver reaching near $50 an ounce for the first time in history following the Hunt Brothers’ attempt to corner the futures market. Silver ultimately peaked in January 1980 and came crashing back down. That 1980 high then held for decades to come. Fast forward to today, and Silver seems to be making the same type of blowoff move during the time the same planetary aspect is again in effect. No one knows when or at what level Silver ultimately peaks for this cycle, but it might be prudent to keep the words of Mark Twain in mind: “History doesn’t repeat itself, but it often rhymes.”