TradFi 2026 New Year Observation: Why Is Silver More Favored Than Gold Under the Expectation of Rate Cuts?

According to the market briefing on January 2nd, senior market analyst Rania Gule from trading platform XS.com presented an intriguing viewpoint in her latest report: in a macro environment where interest rates may decline, silver is more likely to benefit than gold.

This perspective is not merely speculation but is based on recent trends in traditional finance (TradFi) capital flows and changes in global fundamentals.

Silver’s Recent Strong Performance: Near 148% Increase in 2025

Let’s first look at silver’s recent performance: In 2025, silver prices increased by approximately 148%. This gain not only outperformed gold but also ranked highly among many traditional safe-haven assets.

This upward trend reflects silver’s “dual attributes”:

• Financial safe-haven demand (hedging monetary policy and macro risks)
• Growing industrial demand (including solar energy, electric vehicles, AI data centers, etc.)

Therefore, silver’s rise is not just a “value preservation” attribute but also driven by a macro hedge + real-world demand dual engine.

Why is TradFi now paying attention to silver?

1. Silver is highly sensitive to monetary policy

Gule points out a key point: Silver is more sensitive to changes in monetary policy than gold.

Under expectations of rate cuts:

• Cost of capital decreases
• Real interest rates decline
• US dollar weakens

These factors often mean an amplified marginal benefit for precious metals.

Especially for silver, compared to gold:

• Lower unit price
• Easier to trade
• Higher liquidity
• Attractive to both retail and institutional investors

Thus, within the TradFi system, it is gradually revalued from a “small metal” to a “big opportunity.”

Will rate cuts really push up silver?

In the logic of TradFi, the impact of rate cuts involves three levels:

✔️ Lowering real interest rates

When nominal interest rates fall while inflation expectations do not decrease, real interest rates become even lower or negative. This implies an increased implicit cost of holding cash, prompting capital to flow into physical assets and precious metals for safe-haven purposes.

✔️ US dollar may weaken

TradFi capital is usually dollar-denominated. When expectations of rate cuts rise, capital often flows out of dollar assets and into “hard assets” like precious metals. Silver, being cheaper and more elastic among precious metals, often becomes more attractive.

✔️ Industrial demand has fundamental support

Unlike gold, which mainly serves as a safe-haven store of value, silver also has practical industrial applications. This attribute is amplified during manufacturing recovery cycles or AI industry growth periods.

Overall, silver’s response to macro signals of rate cuts tends to be more intense than gold’s.

Fed’s 2026 Meeting Expectations (from a TradFi perspective)

While the specific agenda depends on official announcements, historically, the Federal Reserve typically holds policy meetings during these periods:

In these meetings, the focus of TradFi is usually on:

• Whether interest rates will be lowered
• Shift towards easing monetary policy
• The Fed’s latest assessment of inflation
• Asset purchase and liquidity policies

Once the Fed signals a “more accommodative monetary policy,” it triggers a dual reaction in risk assets and precious metals within the TradFi underlying mechanisms.

For silver, under the dual influence of rate cut expectations and US dollar depreciation, it often moves earlier and more significantly than gold.

What does this mean for crypto users?

Many crypto users mainly hold assets like USDT and mainstream coins, when the US dollar weakens + traditional safe-haven assets rise:

• USDT’s purchasing power passively declines
• Crypto assets themselves have not shown significant recent growth
• Limited sources of yield exposure within the crypto system

At this point, assets within the TradFi system (such as silver, gold, commodities) can serve as another investment target to diversify and hedge risks.

In other words, for investors seeking to hedge single risks + enhance yield opportunities:

Merely “focusing on on-chain” is not enough Merely “focusing on crypto” is not enough Data and signals from the TradFi market are another investment pathway

Whether going long silver, shorting the dollar, or understanding how monetary policy impacts asset prices, TradFi offers a risk management and opportunity recognition framework different from pure crypto markets.

Summary

The nearly 148% increase in silver in 2025 is not just a price event but also indicates that mainstream TradFi logic is being reshuffled: Silver has risen from a “marginal asset” to a “macro hedge target.”

In 2026, silver may benefit more than gold from:

📌 Expectations of rate cuts 📌 US dollar depreciation 📌 Growth in industrial demand 📌 Investor safe-haven demand

For crypto users, understanding these traditional financial (TradFi) signals is not only about broadening perspectives but also a necessary course to build multi-asset, cross-market risk hedging portfolios.