Silver Reaches All-Time High, Driven by Investment Demand and Supply Shortages
Silver has reached an all-time high this Friday, fueled by increased investment demand and supply constraints. Meanwhile, gold closed the week with a gain as expectations grow for the Federal Reserve to cut interest rates.
Silver’s Impressive Performance
- Spot silver increased by 2.3%, reaching $66.96 per ounce, setting the stage for an 8.1% weekly gain after hitting a record high of $67.20 during Friday’s session.
- This year, silver has surged by 132%, significantly outpacing gold’s 65% rise, driven by robust investment demand and supply limitations.
Michael Matousek, chief trader at U.S. Global Investors, explained: “Historically, gold leads the way, but in the past two months, silver has taken the lead. When there’s such a wide gap, investors start favoring gold and reinforcing their short-term positions.”
Gold’s Weekly Gain and Market Factors
Gold for immediate delivery rose 0.3% to $4,346.69 per ounce at 16:38 GMT and was set to finish the week with a gain over 1%. Gold futures in the U.S. also increased by 0.4% to $4,380.
Phillip Streible, chief market strategist at Blue Line Futures, commented: “Consumer price index data in the U.S. rose 2.7% year-over-year in November, lower than economists’ forecast of a 3.1% increase. This, combined with the unemployment rate climbing to 4.6% in November—the highest since September 2021—according to the U.S. Department of Labor, further supports the belief that the Federal Reserve should continue its accommodative stance.”
Other Precious Metals’ Performance
- Platinum gained 3.2% to $1,977.85, following its highest price in over 17 years on Thursday.
- Palladium rose 0.4% to $1,701.75, after hitting its highest level in nearly three years at the start of Friday’s session. Both metals are on track for weekly gains.
Key Questions and Answers
- Q: Why is silver performing exceptionally well? Silver’s performance is driven by strong investment demand and limited supply, making it an attractive alternative to gold.
- Q: What factors are influencing gold’s weekly gain? Growing expectations of the Federal Reserve cutting interest rates, along with lower-than-expected U.S. inflation and rising unemployment, are supporting gold’s weekly gains.
- Q: How are other precious metals faring? Platinum and palladium are also experiencing weekly gains, with platinum nearing its highest price in over 17 years and palladium reaching its highest level in nearly three years.
