Gold and Silver Hit Record Highs

Gold reached a record high on Monday, while silver prices approached their highest levels in 12 years, continuing the upward trend in the metals market this year.

Gold briefly traded just above $2,450 per ounce during early morning trading, surpassing the previous highs set in April, before retracting some gains. Silver also saw a significant increase, reaching just over $32 per ounce, its highest level since late 2012.

Gold's recent surge is attributed to expectations of a Federal Reserve rate cut this year, along with strong demand from central banks and buyers in Asia. Traders anticipate nearly two quarter-point cuts from the Fed this year, with November being the most likely starting point. Additionally, the People's Bank of China (PBoC) bought gold for the 18th consecutive month in April, adding 60,000 troy ounces to its reserves. Chinese investors are increasingly turning to gold as a safe-haven asset to protect against economic uncertainties, driving the price of the precious metal to record highs. Recent data also indicates that Turkey and several countries in the Middle East are actively purchasing bullion.

Silver has outpaced gold in recent weeks, with a 35% increase this year compared to gold's 18% rise. Unlike gold, silver has significant industrial applications, such as in solar panel cells. According to recent data from the Silver Institute, an industry nonprofit, silver's industrial demand reached a new high in 2023 for the third consecutive year.

This industrial use makes silver's price potentially more sensitive to economic fluctuations.

As such, commodities are looking very optimistic right now, particularly precious metals such as Gold and Silver.


Sources: Yahoo Finance & FXStreet.

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