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Silver Price News: Silver Hits 12-Year High as Gold Leads the Way
Silver prices surged on Friday, capping a bullish week for the precious metal, as gold pushed into new territory on the upside.
Silver prices rallied as high as $34.11 an ounce on Friday – the highest price since October 2012 – before easing slightly to $33.74 later in the session. That compared with around $31.80 an ounce in late trades on Thursday.
Silver’s surge at the end of the week followed a rather lacklustre few days, with the metal trading sideways from Monday to Thursday, showing little impetus to move in either direction.
The grey metal appeared to show a delayed reaction on Friday to gold’s surge to an all-time high on Thursday, with both precious metals taking support from falling interest rates and safe haven demand. The ECB’s 25-basis point cut to interest rates on Thursday came as inflation in the Eurozone fell below the 2% target in September.
Silver prices also took support from ongoing geopolitical tensions in the Middle East and Ukraine, and uncertainty ahead of the November 5 US elections, with recent polls suggesting a tight race between Republican candidate Donald Trump and Democratic candidate Kamala Harris.
Elsewhere, Russia’s draft federal budget for the coming year includes plans for the country’s central bank to acquire silver for part of its reserves for the first time, according to recent news reports. The move could represent additional demand for the metal, contributing to stronger prices in the coming months, particularly if it becomes a wider trend among other central banks. Read More
Gold Price News: Gold Hits All-Time Highs on Lower Interest Rates, Safe-Haven Demand
Gold prices put in a fourth consecutive day of gains on Friday, rising to a fresh all-time high as the metal took continued support from falling interest rates and safe haven demand.
Prices rose as high as $2,725 an ounce on Friday – a new all-time high for gold – and up from around $2,693 an ounce in late trades on Thursday.
The ECB’s 25 basis-point interest rate cut on Thursday provided another reminder that major economy central banks are now in a rate-cutting cycle, now that inflation is coming down closer to target ranges.
Uncertainty over the outcome of the US election on November 5 remains a wildcard factor for gold, while attention remains focused on the US Fed, with the market pricing in a roughly 90% chance of a further 25 basis point cut at its upcoming meeting two days later on November 7.
Geopolitical factors continue to drive interest in safe havens like gold. Some observers have described Israel’s killing of Hamas leader Yahya Sinwar last week as a victory for Israeli leader Benjamin Netanyahu, and a move that can potentially pave the way for a ceasefire deal and eventual peace. However, this somewhat rosy picture fails to account for Lebanese militant group Hezbollah’s reaction to the killing, with the group on Friday threatening a ‘new and escalating phase’ of its war with Israel. Read More
Gold shines as ultimate safe-haven asset, set to hit $3,000/oz by 2025 – Bank of America
After years of receiving no love from retail investors as well as institutions, gold has been on a non-stop tear, setting record high after record high, and according to one bank, investors are now looking more closely at the yellow metal, which has become increasingly attractive as other traditional “safe haven” assets face mounting risks.
According to strategists at Bank of America, investors – which includes central banks – should rotate into gold as a form of wealth protection against stubborn inflation and debt debasement caused by endless fiat printing and government borrowing.
“Gold looks to be the last 'safe-haven' asset standing, incentivizing traders including central banks to increase exposure,” the strategists said in a Wednesday note. Read More
New WGC model predicts gold will provide an annual return of 5% from 2025-2040
The rising price of gold has led to a resurgence of interest in the yellow metal, especially as global economic conditions worsen and geopolitical tensions escalate. To help investors better gauge how gold could benefit their portfolios, the World Gold Council has released a new tool to help determine gold’s real return.
“While gold’s contribution to managing portfolio risk is well established, supported by a large body of work devoted to its hedging characteristics, its contribution to portfolio return is not,” the WGC wrote. “Frameworks for estimating gold’s long-term return exist but fall short of a robust approach that aligns with the capital market assumptions for other asset classes.”
“Gold’s dual nature, as both a real good and a financial asset, means that its value is not easily explained by traditional asset pricing models,” they added. “This is further complicated by gold’s continued use as a monetary asset within central bank reserves, despite the ending of the Gold Standard and the mandatory requirement to hold gold as reserves more than five decades ago.”
Since gold doesn’t generate cash flows, the WGC highlighted that “traditional discounted cash flow models are not applicable,” adding that “Generally, commodity pricing models also fall short given gold’s unique and ever-growing above-ground stock that, among other things, diminishes primary production as marginal supply.” Read More
Wall Street all in on further gains for gold, Main Street grows more bullish for next week’s price action
The latest Kitco News Weekly Gold Survey showed industry experts nearly unanimous in their bullish outlook for gold, while a strong majority of retail sentiment also moved back into optimistic territory after three straight weeks of diminishing belief in the yellow metal’s momentum.
“I am bullish on Gold for the coming week,” said Colin Cieszynski, chief market strategist at SIA Wealth Management. “The current rally appears unrelenting and with the price breaking out to new highs and nothing notable on the calendar, Gold’s positive momentum. What remains most important for Gold is that this rally is being driven by a general appreciation against all currencies and not just the USD. In the case of this week, a surge was sparked by the ECB rate cut.”
Marc Chandler, managing director at Bannockburn Global Forex, said that on balance, gold still has upward momentum.
“Gold reached new highs before the weekend near $2717. The last leg up has taken place alongside a stronger US dollar and higher US rates,” he said. “Middle East tensions remain elevated and the upcoming BRICS summit highlights the central bank demand for the yellow metal.” Read More
Europe and China will drive gold prices higher despite USD strength, silver’s breakout above $33/oz has finally begun – Heraeus
European and Chinese market dynamics will support further demand for gold, while silver’s long-awaited breakout is now underway, according to precious metals analysts at Heraeus.
In their latest precious metals update, the analysts said global gold demand will rise even higher as the Chinese market enters peak buying season.
“Gold withdrawals from the Shanghai Gold Exchange (SGE) rose by 12.8% month-on-month in September, following the seasonal trend as wholesalers stocked up for the Golden Week holiday in early October,” they wrote. “Withdrawals from the exchange represent gold demand from wholesalers and banks within China. As we move deeper into Q4, consumer gold demand is expected to stick to its seasonal pattern and pick up. The saving rate of the Chinese population is near record highs, while consumer confidence is near record lows, implying there is cash to be spent but not the willingness to spend it. If government stimulus raises consumer sentiment, consumer spending could rise – a portion of which is likely to be directed at jewellery and luxury goods.” Read More
What's Driving Gold's Surge?
This week has started extraordinarily well for gold prices. The spot price has soared to an impressive $2,720, up more than 32% this year, despite diminishing geopolitical risk.
So, why is this happening, what can we expect next, and is it time to take profits?
Starting with the latter: unfortunately, there is no one-size-fits-all answer. Investment decisions should vary based on individual objectives and risk tolerance, not dizzying market movements.
For example, short-term investors may want to lock in profits or at least part of them, especially if we are talking about risky gold-linked instruments such as derivatives.
For long-term investors, holding on could still be a good strategy. With the Fed's rate cuts and current geopolitical tensions, an upside potential could be above $3,000.
At the same time, prices for other metals, including silver, may continue to rise. When it comes to copper, however, economic stimulus in China needs to yield the desired results. Unfortunately, that seems unlikely. Read More
Gold price firmer but backs off overnight record high
Gold prices are modestly higher in midday U.S. trading Monday after hitting another record high early on, at $2,755.40, basis December Comex futures. Silver futures prices are solidly up and notched a 12-year high today. Safe-haven demand, worries about “de-dollarization” and bullish technicals continue to push both precious metals prices higher. December gold was last up $3.20 at $2,733.20 and December silver was up $0.646 at $33.885.
Both precious metals did back down from their daily highs today, as the U.S. dollar index rallied and U.S. Treasury yields also up-ticked. Profit-taking from the shorter-term futures traders is featured.
The recent rallies in gold and silver come as Russia hosts the BRIC summit Tuesday, attended by China’s Xi Jinping and other developing nations’ officials. Russian President Putin wants a new global financial payments system to counter U.S. dollar dominance of global foreign reserves. Around 58% of central bank foreign-reserve currencies currently are in dollar-denominated assets. Gold stands to benefit from more “de-dollarization” by BRICS and other countries.
Technically, December gold bulls have the strong overall near-term technical advantage. Bulls’ next upside price objective is to produce a close above solid resistance at $2,800.00. Bears' next near-term downside price objective is pushing futures prices below solid technical support at $2,650.00. First resistance is seen at the record high of $2,755.40 and then at $2,775.00. First support is seen at $2,708.70 and then at $2,700.00. Wyckoff's Market Rating: 9.5.
Image Source: Kitco News
December silver futures bulls have the strong overall near-term technical advantage. Prices are in an accelerating 2.5-month-old uptrend on the daily bar chart. Silver bulls' next upside price objective is closing prices above solid technical resistance at $37.50. The next downside price objective for the bears is closing prices below solid support at $32.00. First resistance is seen at today’s high of $34.485 and then at $35.00. Next support is seen at the overnight low of $33.66 and then at $33.225. Wyckoff's Market Rating: 9.0. Read More
Image Source: Kitco News
Gold's record-setting rally faces threat from soaring bond yields – Mike McGlone
Gold has been on a tear in 2024, with the latest record high coming in the early hours on Monday, and while the yellow metal has looked near-unstoppable recently, one analyst suggests there is one thing that could spoil the party: a surge in bond yields.
“New highs in the ratio of gold to US Treasury bonds could be vulnerable to some reversion, especially if Vice President Kamala Harris wins the presidency and the House or Senate is controlled by Republicans – a check on rising budget deficits,” said Mike McGlone, Senior Commodity Strategist at Bloomberg Intelligence. “The record-setting metal and rising bond yields, on the back of Federal Reserve easing, may be pricing in inflation and volatility if former President Donald Trump gains a second term.”
McGlone questioned, “Is Gold Overheating Compared to T-Bonds?”
“Gold's parabolic run vs. US Treasury-bond prices appears unsustainable, especially if Harris wins the presidency,” he reiterated. “Our graphic shows the rare crocodile-jaw pattern of the metal's hot price vs. the cold Bloomberg US Treasury 20+ total return gauge and vs. the S&P 500.” Read More
Gold rally reflects growth of dollar alternatives, West must wake up – El-Erian
Western countries should pay more attention to the skyrocketing gold price, as the precious metal’s persistent rally reflects increasing interest in alternatives to the dollar-based financial system, according to Mohamed El-Erian, Former CEO of PIMCO and current president of Queens’ College, Cambridge.
“Something strange has happened to the price of gold over the past year,” El-Erian wrote in the Financial Times on Monday. “In setting one record level after the other, it seems to have decoupled from its traditional historical influencers, such as interest rates, inflation and the dollar. Moreover, the consistency of its rise stands in contrast to fluctuations in pivotal geopolitical situations.”
He said that gold’s ‘all-weather’ price increase indicates the presence of something that goes beyond short-term economic, electoral, and geopolitical developments. “It captures an increasingly persistent behavioural trend among China and ‘middle power’ countries, as well as others,” he said. “And it is a trend that the west should be paying greater attention to.”
El-Erian noted that the price of an ounce of gold has increased from $1,947 per ounce to over $2,700, a gain of almost 40 per cent in the past 12 months. “Interestingly, this march up in price has been relatively linear, with any pullback attracting more buyers,” he said. “It has occurred despite some wild swings in expected policy rates, a wide fluctuation band for benchmark US yields, falling inflation and currency volatility.” Read More
Live From The Vault - Episode: 195
Russia Leads BRICS Nations into Silver
In this week’s Live from the Vault, Andrew Maguire discusses the upcoming BRICS currency launch and its potential impact on gold and silver prices, highlighting the undeniable physical demand for metals that defies paper market manipulation.
As central banks in Russia, India, and China continue to accumulate precious metals, Andrew anticipates an explosive price surge, bringing silver to the cusp of a massive rally that could present a crucial test for short sellers.
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
Featured Image - Source: Unsplash
