Gold and Silver Prices Surge
Gold prices reached a seven-week peak on Friday, driven by a weaker dollar, expectations of interest rate cuts, and a heightened demand for safe-haven assets amid geopolitical tensions. Silver, on the other hand, achieved a record high.
At 0945 GMT, spot gold climbed by 0.7% to $4,311.73 per ounce, marking its highest level since October 21, and was on track for a 2.7% weekly gain. Meanwhile, U.S. gold futures also increased by 0.7%, reaching $4,343.50.
The dollar lingered near a two-month low, continuing its decline for the third consecutive week, which made it easier for foreign buyers to purchase bullion.
Zane Vawda, an analyst at OANDA Market Pulse, noted that a significant rise in weekly U.S. unemployment claims and escalating tensions between the U.S. and Venezuela were bolstering gold prices, with strong security demand playing an important role.
Last week saw new jobless claims in the U.S. increase by the largest margin in almost four-and-a-half years, reversing a notable drop from the previous week.
On Wednesday, the U.S. Federal Reserve cut interest rates by 25 basis points for the third time this year, although it maintained a cautious stance regarding future rate reductions.
Currently, investors are anticipating two interest rate cuts next year, and next week’s U.S. non-farm employment report could yield further insights into the Fed’s forthcoming policy decisions.
Low interest rates typically benefit non-yielding assets like gold.
On the geopolitical stage, the U.S. is preparing to intercept more vessels transporting Venezuelan oil, following the recent seizure of a tanker.
In India, however, gold discounts widened this week due to a slump in demand, even with the wedding season ongoing. Similarly, high spot prices have dampened demand in China.
Spot silver rose by 0.5% to $63.87 per ounce after hitting a new high of $64.32, and it is poised for a 9.5% weekly gain.
This year, silver prices have more than doubled, spurred by robust industrial demand, declining inventories, and its recent inclusion on the U.S. Critical Minerals List.
“Silver is bolstered by industrial demand amid concerns of shortages, continued market tightness, and speculative excitement, particularly from retail investors, which is driving flows into silver ETFs,” explained Ole Hansen, head of commodity strategy at Saxo Bank.
In the platinum market, palladium rose by 0.8% to $1,708.11, while another metal saw a 2.2% increase, reaching $1,516.95. Both metals were signaling weekly gains.
