Gold and Silver on the Verge of New Records!
Gold and silver are moving near record levels after weaker-than-expected US inflation data reinforced speculation of further interest rate cuts. Platinum is also nearing a 17-year peak. In morning trading in Singapore, gold was around $4,330.67/ounce, silver at $65.51/ounce (near a record $66.89), while the Bloomberg Dollar Index was flat.
Key support came from US core inflation, which rose at its slowest pace since early 2021. This condition strengthens the argument that borrowing costs could fall, which is usually a positive sentiment for precious metals because gold and silver are non-yielding. However, the latest inflation report was considered less "clean" due to the impact of the six-week government shutdown that ended last month, leading some to question the quality of the data.
On the policy front, the Federal Reserve just cut interest rates for the third time in a row last week but has not yet given a firm signal about the pace of further easing. Market participants estimate the chance of a January cut is around 25%. Meanwhile, US President Donald Trump is again pushing for more aggressive interest rate cuts next year, so the direction of monetary policy remains a key concern.
Geopolitical factors are also strengthening gold's appeal as a safe haven asset. Rising tensions in Venezuela provided additional support for gold prices this week, after Trump ordered a blockade of all sanctioned oil tankers. Pressure on Caracas is said to have increased due to the strengthening US military presence in the region, keeping the market wary of the risk of escalation.
Precious metals have rallied strongly this year and are poised for their best annual performance since 1979. Silver has more than doubled, while gold has risen by about two-thirds, driven by central bank buying and inflows into gold-backed ETFs. Platinum has also continued its winning streak and has risen sharply this year, driven by signs of tightening supply in the London market, stockpiling in the US to anticipate tariff risks, and strong demand from China following the resumption of futures trading in Guangzhou; palladium has also strengthened. (asd)
Source: Bloomberg.com
