Background on Key Figures and Relevance
Gold, a precious metal widely recognized for its value and rarity, has recently experienced a significant surge in price. On Monday, gold broke the $4,400 per ounce mark for the first time ever. This surge was fueled by anticipated interest rate cuts in the United States and ongoing safe-haven buying. Silver, another precious metal, also reached a new historical high.
Gold’s Performance
At 09:55 GMT, spot gold was up by 1.7% at $4,413.01 per ounce after peaking at $4,420.01 earlier in the session. Gold futures for February delivery in the U.S. increased by 1.4% to $4,446.7 per ounce.
- Gold has seen an almost 68% rise this year, marking its largest annual gain since 1979.
- This growth is attributed to robust purchases from central banks, safe-haven flows, and lower interest rates.
Silver’s Performance
Spot silver added 2.8% to reach $68.98, following its new record high of $69.44 in the previous session.
- Silver has surged by 138% this year, driven by supply deficits, growing industrial needs, and strong investment demand.
Market Factors Influencing Precious Metals
Giovanni Staunovo from UBS commented on the situation: “Lower interest rates boost demand for tangible assets like gold and silver. Additionally, copper has reached historical highs, indicating investors’ desire to maintain exposure to commodities likely due to expectations of prolonged high inflation.”
The U.S. dollar was declining, heading for its most significant annual drop since 2017, which makes gold more affordable for foreign buyers.
Performance of Other Precious Metals
Platinum soared 4.2% to $2,056.06, its highest level in over 17 years. Palladium improved by 2.8% to $1,760.86, reaching its highest point in nearly three years.
Key Questions and Answers
- What caused the surge in gold and silver prices? The primary factors driving this increase are anticipated interest rate cuts in the U.S., ongoing safe-haven buying, robust central bank purchases, and lower interest rates.
- Why is the declining U.S. dollar beneficial for gold prices? A weaker dollar makes gold more affordable for foreign buyers, thereby boosting demand and driving up prices.
- What is the significance of copper reaching historical highs? This indicates investors’ desire to maintain exposure to commodities, likely due to expectations of prolonged high inflation.
