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| Gold and silver prices |
Gold and silver prices reached new all-time highs this week, with gold nearing $4,500 an ounce and silver surpassing $70. This surge continues to be driven by persistent geopolitical tensions and the rising appeal of precious metals as a safe-haven investment amidst global uncertainty.
Geopolitical Tensions and Federal Reserve Rate Cuts Fuel Precious Metal Rally
Gold prices rose by 1.2%, setting a new record of just below $4,500 per ounce. Silver followed suit, jumping by 1.8% to trade above $70 for the first time. The rally has been fueled by expectations of further rate cuts by the U.S. Federal Reserve, which are seen as favorable for non-yielding assets like gold and silver. Additionally, geopolitical issues, particularly in Venezuela, have contributed to heightened demand for precious metals as safe-haven assets.
Ahmad Assiri, a strategist at Pepperstone Group, noted that geopolitical tensions, especially the blockade of oil tankers by the U.S., have re-entered the narrative, adding to the demand for gold as a hedge against uncertainty. While these frictions haven’t triggered a full-scale risk-off move, they have increased the background demand for gold.
Gold and Silver Outlook: Strong Growth and Speculative Interest
Gold has gained over 70% this year, marking its best annual performance since 1979. The precious metal’s rally has been supported by strong central bank purchases and significant inflows into exchange-traded funds. Analysts from major banks, including Goldman Sachs, predict that gold will continue its ascent, potentially reaching $4,900 an ounce by 2026, with further upside risks.
Meanwhile, silver's price rally has been even more impressive, increasing by around 140% this year. The surge is driven by both speculative interest and supply chain disruptions, particularly in key trading hubs. The recent historic short squeeze in October also played a significant role in silver's advance. As silver approaches $70 per ounce, analysts like Assiri highlight the tight supply conditions and strong investor interest that are amplifying price movements.
ScrapInsight Commentary
The rapid rise in gold and silver prices reflects the ongoing demand for safe-haven assets amid geopolitical tensions and economic uncertainties. Both metals are expected to maintain bullish momentum, with tight supply and speculative interest continuing to drive prices higher. However, potential regulatory actions, such as tariffs or trade restrictions, could affect the precious metals market in the near future.
