In this arranged photo, one kilogram of silver bars are stacked at a gold bullion dealer at Gold Investments Limited in London, England, Wednesday, July 29, 2020.
Chris Ratcliffe | Bloomberg | Getty Images
Gold’s record-breaking rally may continue, especially as investors prepare for interest rate cuts, but analysts say silver appears poised to overtake gold in the second half of the year.
spot gold price After hitting its highest since 1979 last Thursday, prices edged up to $2,178 an ounce on Monday.
Meanwhile, spot silver prices rose 0.2% to $24.36 an ounce at 6:24 a.m. London time (1:24 a.m. ET). The contract rose more than 5% last week and closed Thursday at its highest level since late December.
Precious metal prices have moved higher in recent weeks as expectations of U.S. interest rate cuts have grown. Federal Reserve Chairman Jerome Powell said on Thursday that inflation is “not far” from the level needed for the central bank to start cutting interest rates.
Gold, often considered a “safe haven” asset in times of financial uncertainty, has risen despite high interest rates and a relatively strong dollar.
“If you look at gold’s correlations, you’ll see that even though gold is described as a defensive asset, it actually oscillates between the two. It can be aligned with risk at times and against risk at other times,” said the company’s director. Marcus Garvey said. Macquarie’s commodities strategy, he told CNBC’s “Signpost Europe” on Friday.
“Then what you need to get back to is what are the underlying causes of these moves and why gold is reacting one way or another, and I think what really makes gold do well … is the response to interest rates. Expect cuts. That’s clearly a positive risk.”
An employee holds a one kilogram gold bar at the YLG Bullion International Co. headquarters in Bangkok, Thailand, Friday, December 22, 2023.
Bloomberg | Bloomberg | Getty Images
Garvey said recent U.S. employment and inflation data could determine whether gold prices, which he described as “extremely resilient” so far, rise to $2,300 or fall back to around $2,100.
“From a silver perspective, I mean, this is really a round number, you want to break through the $24 level comfortably, it feels like you have a little more room to run. You’re just north of that level, but The pullback is clearly still a vulnerability,” Garvey said.
“The last point I would add is that silver, as a precious metal and an industrial metal, if we start to see some pickup in global economic growth this year – which is very much our base case – then I would expect In the third and fourth quarters, silver will go from being a relative underperformer to gold to a relative outperformer.”
Is silver about to have a “brilliant year”?
Gold and silver prices have traditionally shown strong positive correlationalthough silver is sometimes described as “poorer cousin“Golden.
Earlier this year, the Silver Institute explain According to the report, global silver demand is expected to reach 1.2 billion ounces in 2024, the second highest level on record.
The institute, a not-for-profit international association comprised of many members of the white banking industry, told CNBC last month that it expected silver to have a “great year,” particularly on the demand side.
Silver is primarily used for industrial purposes, typically in the manufacturing of cars, solar panels, jewelry, and electronics.
“What typically happens with silver is that it does move with gold, but later,” Randy Smallwood, CEO of Wheaton Precious Metals, told CNBC in early February.
“Gold will go up first, and then you’ll see silver go up very quickly. Silver always does well. It’s just too late.”
—CNBC Li Yingshan contributed to this report.
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