(Kitco News) – It finally happened. Silver is on the move, pushing the price of the precious metal higher heading into the weekend.
Analysts say the white metal is clearly in the lead after lagging amid the surge in gold prices in the first quarter of this year. Not only is silver up over $31 an ounce, but prices are trading at their highest since February 2013. July Silver was last traded at $31.635 per ounce, up 4.65% on the day.
In addition to hitting an 11-year high, silver also rose more than 10% this week, its best performance since early April.
Meanwhile, some analysts believe that gold is firmly above its initial resistance level and expects it to return to all-time highs sooner than expected. June gold futures rose 1.34% on the day to trade at $2,414.60 per ounce. The yellow metal is up nearly 2% this week.
Ole Hansen, head of product strategy at Saxo Bank, said the entire precious metals complex has seen widespread gains. Platinum rose to a one-year high. July platinum futures closed at $1,094 an ounce, up more than 2% on the day.
Traders and analysts ended platinum week with the precious metal up 9% since last Friday. Platinum’s $90 rise this week was its highest gain since February 2021.
Hansen added that the rise in all three metals and the significant decline in the gold-silver ratio indicate solid bullish sentiment in the market, indicating that this breakout could lead to sustained price gains.
“The gold-to-silver ratio is less than a million miles from its long-term average, so silver strength could mean the strength of precious metals in general,” Hansen said.
Fawad Razaqzada, market analyst at StoneX Group and founder of Tradingcandles.com, predicts that this is just the beginning of a new bull market, as the silver market dam finally burst without much of a catalyst. said.
“This groundbreaking move has been building up for days,” he said.
Razakzada pointed out that there is a lot of pent-up sentiment in the silver market as prices have been range-bound for three and a half years. He noted that silver has benefited as both a monetary and industrial metal, so it’s not surprising that it has outperformed in the end.
Silver’s jump comes as copper looks set to end the week at an all-time high above $5.00 per pound.
“Judging by the bullish breakout in copper that occurred a few months ago and continues to this day, [silver’s] “The breakout is sustainable,” he said.
While silver is currently in the spotlight, some analysts warn that this rally is still a showcase for gold.
Gold has held steady near all-time highs as geopolitical uncertainty, central bank demand and strong retail demand in Asia support prices.
Mike McGlone, senior market strategist at Bloomberg Intelligence, said he still prefers gold as a safe-haven asset, especially since the U.S. market is overextended and appears to be due for a correction.
McGlone added that there is a risk for silver if investors start profiting from copper. He explained that lower copper prices will weigh on the white metal.
“(Hedge funds’) copper managed money positions are a bit too net long to sustain levels well above $5/pound, and the S&P 500 is likely to gain some buoyancy,” he said. We need to continue to do so.” “The way I see it, silver is riding the tailwind of copper and gold, and at the end of the day, China is buying gold, but it could be hoarding all metals.”
Julia Kandoszko, CEO of European brokerage Mind Money, also said she sees further potential for gold in the current environment.
“We expect gold prices to rise due to a change in Fed rhetoric, especially if it leads to rate cuts or clear cut plans. Escalation in the Middle East conflict will also support gold. As geopolitical risks rise, investment Houses will buy more gold and prices will rise,” she said.
Khandoshko added that he expects gold prices to return to their long-term upward trend as central banks continue to purchase gold to diversify foreign exchange reserves.
“According to my estimates, the pace of accumulation is actually faster than the IMF report,” he said.
Khandoshko said silver will be sensitive to any data that highlights weakness in economic activity.
“Silver is just a commodity like copper, but gold is a hedging tool. All metals, including silver, are growing today for a simple reason: cautious sentiment about global economic growth. If you look at it, you’ll see that prices have a cyclical tendency: they’re cheap when the economy is down, they’re cheap when the economy is down, and they go up when the economy recovers. she said.
Philippe Streible, chief market strategist at Blue Line Futures, is bullish on gold and silver on this breakout move, but a relatively quiet week could lead to some short-term profit-taking. He said there is.
Some economists say the biggest risk to markets next week is the number of Fed speakers. Six U.S. central bank officials will speak at the event on Monday and Tuesday.
The highlight of this week will be the minutes of the US Federal Reserve’s monetary policy meeting, which concluded on May 1st.
Next week’s economic report will be mostly secondary, with some attention focused on home sales numbers and preliminary sentiment surveys for the manufacturing and services sectors.
The week concludes with the release of durable goods statistics for May.
Economic data to watch next week:
Wednesday: US existing home sales, April/May monetary policy meeting FOMC minutes
Thursday: S&P Flash Manufacturing and Services Sector PMI, Weekly Unemployment Claims, US New Home Sales
Friday: Ordering durable goods
Disclaimer: The views expressed in this article are those of the author and may not reflect the views of Kitco Metals Inc. The author has made every effort to ensure the accuracy of the information provided. However, neither Kitco Metals Inc. nor the author can guarantee such accuracy. This article is strictly for informational purposes only. It is not a solicitation for the exchange of products, securities or other financial instruments. Kitco Metals Inc. and the author of this article do not accept liability for losses and/or damages arising from the use of this publication.
