Silver Hits Record High of $75.15 per Ounce
Silver surpassed the symbolic threshold of $75 per ounce for the first time on Friday in Tokyo’s market, amid a record-breaking streak for precious and industrial metals due to economic uncertainty and geopolitical risks stemming from tensions between the United States and Venezuela.
The silver price reached $75.15 per ounce (31.1 grams), while gold also touched a peak of $4,531.04.
Unprecedented Annual Returns for Metals
Since January, gold has risen nearly 70%, and silver has surged over 150%. These annual returns are unprecedented since 1979.
Considered safe-haven assets, these metals are long-term investments perceived as secure during uncertain times. They are primarily purchased by central banks or private investors to safeguard their wealth amid economic turbulence.
Geopolitical Risks Boost Metal Prices
Analysts attribute the rise of gold and silver to geopolitical risks sparked by conflicts between the United States and Venezuela. Washington has deployed a significant military presence in the Caribbean and imposed a naval petroleum blockade on Caracas, accusing it of financing “narcoterrorism.”
Venezuela, in turn, denies allegations of attempting to overthrow President Nicolas Maduro and seize his assets.
Uncertainty Surrounding Trump’s Presidency
The US dollar and government bonds, which usually serve as safe-haven investments competing with precious metals, have lost their appeal this year.
Much of this uncertainty can be traced back to the presidency of Donald Trump, further exacerbated by the prospect of additional interest rate cuts by the Federal Reserve (Fed), making the dollar less attractive.
Investors are also concerned about public debt in major countries and a potential bubble in the artificial intelligence sector.
These uncertainties drive up not only gold and silver but also other metals, as many investors believe in diversifying their portfolios, according to John Plassard, an analyst at Cité Gestion Private Bank.
Other Metals Experience Historic Price Increases
On Wednesday, metals used in automobile catalytic converters reached historic prices, such as platinum, which traded at $2,981.53 per ounce, while palladium registered its highest value since December 2022.
Copper also surpassed a historical threshold, exceeding $12,000 per tonne. Like platinum, copper has been driven by fears of US tariffs, which have not materialized so far.
“Metals are once again seen as a safeguard rather than just speculative assets,” Plassard explained to AFP.
Key Questions and Answers
- What is the significance of silver breaking $75 per ounce? Silver’s surpassing of the $75 per ounce mark is a symbolic milestone, reflecting investor confidence in precious metals amid economic uncertainty and geopolitical risks.
- Why are precious metals like gold and silver experiencing record-breaking returns? The unprecedented annual returns for precious metals are attributed to their status as safe-haven assets during uncertain times, bolstered by geopolitical risks such as US-Venezuela tensions.
- What factors contribute to the increased demand for metals like silver and gold? Geopolitical risks, economic uncertainty surrounding Donald Trump’s presidency, and concerns about public debt and potential bubbles in sectors like artificial intelligence have driven investor interest in safe-haven metals.
- How do other metals, such as platinum and copper, factor into this trend? Metals like platinum and copper have also experienced historic price increases due to fears of US tariffs, further emphasizing the trend of metals being viewed as safeguards rather than speculative assets.
