Big gains were experienced across different precious metals this week. Gold prices this week finally broke through the $1,800 level after a huge jump on Thursday. This is the highest price for the yellow metal since late February. Gold experienced highs of $1,843/oz this week and closed the week at $1,828/oz, up 3.45% in the last 7 days. Silver too had healthy gains this week jumping 5.51% from $25.93/oz to $27.36/oz, its highest price since late February. Platinum made gains resulting in a 3.91% price increase from $1,201/oz last week to $1,248/oz today. The metal experienced highs of up to $1,271/oz. Palladium made losses this week after an upward momentum that lasted over a month and broke through many all-time-highs. The metal recorded a 2.31% loss from $2,990/oz to $2,921/oz. Palladium prices are still up 23.41% on a 3 month period. Rhodium too made losses this week amounting to a 2.71% decrease in price. The metal is currently priced at $28,700/oz, down from $29,500 last week.
The jump above the $1,800 price tag for gold was done with confidence which probes curiosity on whether the upward momentum has enough traction to continue further. The American Federal Reserve has promised to keep putting pressure on American treasury real yields and its US dollar all while being hands-off on its policy path. This has set a good environment for a bullish run to occur. The US dollar took a big tumble this week and it is currently down 1.76% month-on-month, putting the odds in Gold’s favor. US yields have also been on a downward trend.
Silver is being flooded with bulls currently with some believing it might explode and reach extreme highs like it did in 1971-1980 when it turned a 37x return. Silver has fundamentals that cannot be met by others and makes it a very appealing safe haven to choose. The global debt increased by 8.54% due to COVID-19 and all pressures and debts are being absorbed by national central banks. Furthermore, interest rates are currently at the lowest they’ve ever been making borrowing cheap and in turn, putting the prospects of Silver as a safe haven a very logical one. On top of having a financial value like Gold, Silver has value because half of its demand is derived from industrial purposes. The demand for its industrial use is expected to rise by 15% (Silver Institute) although supply is only projected to rise 8%.
Silver Prices (3 MONTHS)
Source: Tradingview; Silver Futures COMEX
Internationally, the COVID-19 situation seems to have gone completely out of sync with countries lagging while others propel forward. Hence, the price of Gold is much less related to the global situation as it was last year when precious metals like Gold and Silver were reaching decade-high prices. Although we see countries like India, a huge investor in Gold, turn its COVID-19 situation towards the absolute worst, we also see countries like the UK and the US who were once the most hard-hit countries, turn into safe places to be thanks to their massive vaccination efforts. Currently, these precious metals are relying much more on financial fundamentals to influence their movements.
