During the U.S. trading session on Monday, international gold and silver prices both hit record highs. Spot gold stood at the US$4,100/ounce mark, rising by more than US$90 per day, or 2.2%, and by nearly US$1,500 during the year, or more than 56%.
Spot silver prices once rose by more than 3%, breaking through the $52/ounce mark, setting another record high. Since the beginning of this year, silver prices have soared by more than 78%. New York silver futures surged 7% during the day and are currently trading at $50.26 per ounce.
In addition, spot platinum rose 5% to US$1,667.25 per ounce. Spot palladium hit $1,500 per ounce, up 5.69% on the day.
Driven by factors such as geopolitical and economic uncertainty, expectations of interest rate cuts by the Federal Reserve, and strong central bank buying, the prices of precious metals such as gold and silver rose sharply during the U.S. session.
Jeffrey Christian, managing partner of CPM Group, said: “When investors are worried about the situation in the world, whether it is economic or political, gold and silver prices will rise.”
Meanwhile, traders see a 97% chance of a quarter-point rate cut by the Fed in October and a 100% chance of a December rate cut. Gold, as a non-yielding asset, generally performs well in a low interest rate environment.
Analysts at Bank of America and Societe Generale expect gold to hit $5,000 an ounce by 2026, while Standard Chartered has raised its gold price forecast for next year to $4,488.
Investment banks have raised their target prices
Suki Cooper, global head of commodities research at Standard Chartered Bank, said: “We believe this wave of gains is sustainable, but from a long-term upward trend, a short-term correction will be more healthy.”
Recently, the spot silver price in London has been significantly higher than the silver price in New York futures. Prices in the two places usually fluctuate in synchrony. However, due to the sharp decrease in British inventories, traders have rushed to cover their positions, pushing up the London spot price.
At the beginning of this year, London stockpiles were transferred to the United States in large quantities, and traders moved precious metals across the Atlantic by air and sea in response to potential tariff risks. Now, this “silver flow” may be reversed.
Like Nasdaq technology stocks, silver’s rally has benefited from the craze for artificial intelligence, electric vehicles and the energy transition.
Shree Kargutkar, senior portfolio manager at Sprott Asset Management, said: “The amount of metal currently mined and recycled is less than the amount of metal consumed, which is a very clear case of supply and demand imbalance.”
The U.S. Geological Survey has proposed adding silver to its Critical Minerals List. The designation would see silver considered a resource vital to the nation’s economy and security, and could face tariffs like Trump’s previous tariffs on steel, aluminum, lumber and copper products.
Kargutkar noted that people are just trying to get ahead of potential supply disruptions and that tariffs effectively result in each warehouse having to have its own inventory, which in turn leads to hoarding.
Silver supply has been in short supply since 2020, according to the Silver Association, an industry group. Supply has been relatively stable over the past decade, with increased recycling of silver largely making up for reduced mine production.
