Silver prices have surged above $US45 an ounce, reaching a 14-year peak. Gold is also approaching record highs, benefiting from a risk-off sentiment in equity markets and persistent concerns about the US economic outlook. Spot silver rose by as much as 2.6 per cent on Thursday (Friday AEST), continuing a strong rally that has increased prices by 55 per cent this year. This exceeds the 43 per cent gain in gold, which has already set over three dozen records this year. Factors contributing to gold’s rise include a weaker US dollar, central-bank buying, and escalating geopolitical risks.
Precious metals are experiencing strong demand as US stock markets face downward pressure. Increased demand for gold exchange-traded funds (ETFs) this month indicates a growing desire for safe-haven assets. Inflows into global gold ETFs have reached a record $US10.5 billion ($16.1 billion) in September, with year-to-date inflows surpassing $US50 billion, according to Citigroup. ETFs provide investors exposure to the price of gold without requiring physical storage.
Citigroup analysts noted that ETF investments have outperformed other gold demand sectors this year, significantly contributing to the gold price rally. They attributed September’s gold ETF inflows primarily to factors outside of China, including a weakening US labour market, tariff-driven growth concerns, the Federal Reserve’s rate-cutting cycle, and the upcoming shift in Federal Reserve leadership.
Platinum has also seen gains, jumping more than 3 per cent to exceed $US1500 an ounce for the first time since July 2014. Platinum is valued as both an investment asset and an input for industrial products like catalytic converters. The white metal has surged more than 65 per cent this year due to ongoing supply deficits.
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