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Strong rise in metals: gold sets new historical record and silver reaches highs in more than 11 years

Strong rise in metals: gold sets new historical record and silver reaches highs in more than 11 years

Spot gold rose 0.9% to $2,436.76 an ounce at 0340 GMT, after reaching an all-time high of $2,440.49 at the start of the session. US gold futures rise 1% to $2,440.60.

The main driver of gold is the weakness of the American dollar and the expectation that the Federal Reserve will cut rates soon, said Kyle Rodda, financial markets analyst at Capital.com.

The dollar index remained weak, causing bullion to greenback price are more attractive to buyers of other currencies.

Last week’s data showed signs of cooling inflation and traders now expect a 65% chance of a rate cut in September.

Why does gold go up

Bullion is known as a hedge against inflation, but at higher ratess increase the opportunity cost of holding non-yielding gold.

The minutes of the Federal Reserve’s latest policy meeting, due to be released on Wednesday, along with comments from several Fed speakers, will be in the focus of investors this week.

“The price of gold hit an all-time high ahead of the Chinese (stock market) open on Monday. However, as the move has not been confirmed by a weaker US dollar, it appears to have been boosted by the rise in the metal futures on Chinese stock exchanges”said City Index chief analyst Matt Simpson.

China, the main consumer of bullion and most industrial metals, announced on Friday “historic” measures to stabilize its real estate sector, affected by the crisis.

According to Reuters technical analyst Wang Tao, spot gold could test the resistance of $2,447 an ounce, and a break above could trigger a rise to $2,455.

Markets: how much are other metals trading at?

The silver spot rose 2.5% to $32.28, after reaching a high in more than 11 years.

He platinum It advanced 0.7% to $1,088.75, after reaching its highest since May 12, 2023. Palladium fell 0.5% to $1,013.56.

Neil Wilson, head of analysis at Finalto, adds that the death in accident of the Iranian president, Ebrahim Raisi, may also be contributing to gold’s rise.

From the Jupiter AM manager they explain that the recent increases in silver have to do with India.

“In March, India imported a record volume of 70 million ounces (approximately 2,200 tons) of silver and more than half of the imports were silver grains,” they indicate. “India’s decision to import silver grains suggests “This will probably be destined for industry and, in this sense, the recently announced plans to build an electric vehicle megafactory are a possible destination for the unprecedented flows of silver towards the country.”

copper.jpg

Copper broke the $11,000 barrier for the first time.

Along with gold and silver, other metals, such as platinum or copper, are also registering highs. In it In the case of copper, it rose more than 25% in the year and broke the US$11,000 barrier for the first time.

The copper demand It is widely considered an indicator of economic health, since the metal is key to the energy transition ecosystem. It is critical to the manufacturing of electric vehicles, power grids and wind turbines, especially as the global economy electrifies.

Demand for copper from electric vehicles and the transportation sector in general is projected to increase about 5% this year, according to Bank of America.

Copper is also a critical material for cables used in data centers, especially as a boom in artificial intelligence drives more need for data centers.

“With demand for electric vehicles still growing, although at a slower pace, the focus has shifted to the copper needed in the construction of data centers,” says BofA in a note collected by ‘CNBC’.

Source: Ambito

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