Silver prices have surged above $US40 an ounce for the first time since 2011, while gold prices are approaching all-time highs. The precious metal markets have experienced a multiyear bull run, gaining further momentum from the prospect of Federal Reserve rate cuts. Spot silver rose as much as 2.6 per cent to $US40.7599 an ounce, marking a year-to-date increase of approximately 40 per cent. Gold also jumped, climbing as much as 1.2 per cent to just below its April record of above $US3500 an ounce. Gold hit a record on Monday in a London Bullion Market Association auction.
Both metals have more than doubled in value over the past three years, driven by increasing risks in geopolitics, business, and global trade. The most recent surge has been fuelled by expectations that the US central bank will reduce interest rates at its next meeting in September. A key US jobs report this Friday is expected to show a subdued labor market, further supporting the case for rate cuts.
According to Saxo Capital Markets strategist Charu Chanana, gold and silver have “suddenly sprung to life as both fundamentals and technicals aligned.” Concerns about the Fed’s future policy direction have underpinned the gains. The breaching of key resistance levels around $US3450 for gold and $US40 for silver has triggered significant momentum buying in the market.
