The prices of gold and silver continue to rise, setting new price records in recent weeks. According to analysts’ forecasts, this trend may persist, especially against the backdrop of the unstable economic situation in the U.S. and the growing demand for safe-haven assets.
This is reported by Finway
Price Increases for Precious Metals
On Monday, the price of gold rose by 2%, reaching its highest level since October 27. Currently, the spot price of gold stands at $4,079.49 per ounce, or $131.16 per gram. Gold futures for December delivery increased by 1.9%, reaching $4,087.80 per ounce ($131.43 per gram).
Among other precious metals, there has been a significant increase in prices. Spot silver has risen by 3.3% and is now priced at $49.91 per ounce ($1.60 per gram), the highest level since October 21. Platinum gained 2% in price, reaching $1,576.25 per ounce ($50.68 per gram), while palladium increased by 1.7% to $1,403.63 per ounce ($45.13 per gram).
Reasons for the Increase and Market Impact
“The upward price trend was triggered by weak economic indicators from the U.S. They reinforced expectations for a Federal Reserve (Fed) rate cut next month. In turn, the weakening of the dollar provided additional support for gold and other precious metals.”
Market participants assess the probability of a Fed rate cut in December at 65%. During periods of low interest rates and economic uncertainty, gold, as a non-yielding asset, traditionally enjoys increased demand.
Statistics from last week indicate a reduction in the number of jobs in the U.S. in October, particularly in the government and retail sectors. At the same time, companies optimizing costs and implementing artificial intelligence technologies have significantly increased the number of announced layoffs.
An additional factor was the publication of a survey indicating that at the beginning of November, the consumer sentiment index in the U.S. fell to its lowest level in the past 3.5 years. This is attributed to concerns about the potential economic consequences of the longest government shutdown in history.
White House economic advisor Kevin Hassett warned that U.S. economic growth in the fourth quarter could turn negative if the government shutdown continues. However, late on Sunday, the U.S. Senate voted to restore federal government operations, ending the 40-day shutdown.
The heightened demand for safe assets persists due to instability in global markets, including trade wars and geopolitical tensions. Against this backdrop, analysts predict further increases in the price of gold, which could soon reach $4,120 – $4,130 per ounce ($132.46 per gram).