Silver’s Record-Breaking Surge
On Tuesday, silver extended its record-breaking rally, surpassing the crucial $70 per ounce mark. Both gold and platinum also hit historic highs.
Spot silver rose by 3.49%, reaching $71.47 per ounce after previously hitting a new all-time high of $71.49. Year-to-date, prices have surged by 147%.
“At the heart of this lies the reality of supply and demand in a market that has been in deficit for five years, along with growing industrial demand,” said Peter Grant, senior strategist for metals at Zaner Metals. “The safe-haven factor, expectations of a weaker dollar, and lower yields also contribute to the demand.”
“The next target for silver is $75, but year-end profit-taking could cause a pullback,” Grant added.
Weakening US Dollar Boosts Metal Appeal
The US dollar fell in a shortened week due to holidays. A weaker dollar makes dollar-denominated metals more attractive for foreign buyers.
Gold’s Historic Ascent
Spot gold rose by 0.87% to $4,484.75 per ounce after reaching a record high of $4,497.55.
Gold bullion has surged approximately 70% this year, driven by geopolitical tensions, US rate cuts, strong central bank buying, and solid investment demand.
US gold futures for February delivery closed up 0.8% at $4,505.7.
“We continue to see the long-term theme of central bank reserve diversification as a significant driver for gold prices until the end of the decade,” SP Angel analysts said in a note.
“We expect gold to rise towards $5,000 per ounce next year,” the note added.
Geopolitical Tensions Fuel Metal Prices
In the latest surge of geopolitical tensions, US President Donald Trump last week ordered a “blockade” on all sanctioned oil tankers entering and leaving Venezuela, stating he did not rule out the possibility of war with the country.
Platinum’s Historic Gains
Spot platinum rose by 6.8% to $2,268.95, after hitting a record high of $2,274.10 per ounce on the same day.
Palladium advanced 6.5%, reaching a three-year high of $1,874.22. These metals are used in automotive catalytic converters, helping reduce harmful emissions.
Earlier this month, the European Commission announced plans to phase out the effective ban on combustion engine cars by 2035.
Key Questions and Answers
- What is driving the surge in silver prices? The primary factors are supply and demand deficits, growing industrial demand, safe-haven appeal, expectations of a weaker US dollar, and lower yields.
- Why are gold prices rising? Geopolitical tensions, US rate cuts, strong central bank buying, and solid investment demand are fueling gold’s ascent.
- What role do platinum and palladium play in the automotive industry? These metals are used in automotive catalytic converters, helping reduce harmful emissions.
- How might geopolitical tensions impact metal prices? Geopolitical tensions can increase demand for safe-haven assets like gold and silver, driving their prices higher.
- What is the European Commission’s stance on combustion engine cars? The European Commission plans to phase out the effective ban on combustion engine cars by 2035.
