Gold and Silver Hit New Records, Fueled by Geopolitical Tensions and a Weakening Dollar
Gold and silver continued to set new record highs on Wednesday, driven by escalating geopolitical tensions and a weakening US dollar. Spot gold prices rose 1.2%, surpassing $4,530 per ounce, hitting an all-time high. Tensions in Venezuela, where the US has blocked oil tankers, have added to gold's appeal as a safe-haven asset. Furthermore, the US offensive in Nigeria against terrorist groups has exacerbated global uncertainty, further boosting precious metal prices.
Meanwhile, spot silver for immediate delivery also saw a significant 4.6% increase, surpassing $75 per ounce for the first time. This increase was driven by speculative inflows and supply dislocations following the historic short squeeze in October. Silver's strength has been even more spectacular than gold's, with the price of the white metal rising nearly 150% year-to-date.
Furthermore, the US dollar index weakened by about 0.8% this week, its biggest decline since June. A weaker US dollar generally supports gold and silver prices, as the precious metals become more affordable for holders of other currencies. Gold has risen about 70% this year, while silver has surged more than 150%, putting both metals on track for their best annual performance since 1979.
This remarkable rally has been driven by high central bank buying, inflows into ETFs, and successive interest rate cuts by the US Federal Reserve. With lower interest rates, the cost of holding non-interest-bearing precious metals becomes cheaper, encouraging more investment in gold and silver.
On the other hand, although some London vaults have attracted large inflows, most available silver remains in New York, as traders await the outcome of a US Commerce Department investigation into whether imports of critical minerals pose a national security risk, which could lead to tariffs or trade restrictions on those metals. (az)
Source: Newsmaker.id
