The price of gold for immediate delivery rose to $3,508.50 per troy ounce (oz; 31.1 grams) today, reaching a historic high. The yellow metal is being helped by a weak dollar and growing bets on interest rate cuts in the United States. Its price has been rising for the sixth day in a row. Silver is holding near the 14-year high it reached on Monday.
Expected rate cuts and loss of confidence
“The weaker economic environment and expectations of interest rate cuts in the US are driving up precious metal prices,” Kyle Rodda, an analyst at Capital.com, told Reuters. “Another factor is the deepening crisis of confidence in dollar assets due to US President Donald Trump’s attacks on the independence of the US Federal Reserve (Fed),” he added.
For several months, Trump has been criticizing the Fed and its chairman, Jerome Powell, for not lowering interest rates yet. The president also criticizes Powell for the costly renovation of the central bank’s headquarters in Washington. According to the CME FedWatch tool, investors currently estimate the probability that the Fed will cut its benchmark interest rate by a quarter of a percentage point on September 17 at 90 percent.
Silver surpasses $40 and investor interest drives precious metal prices higher
The price of silver for immediate delivery rose 0.1 percent to $40.71 per ounce at around 7:30 a.m. CEST. Silver surpassed the $40 mark on Monday, when it sold for the highest price since September 2011.
“In the long term, the fundamentals for gold and silver remain strong. Central banks continue to buy gold, and industrial demand associated with the transition to renewable energy sources is pushing up the price of silver. In addition, investors‘ growing appetite for precious metals is increasing the imbalance between supply and demand. Investor interest is clearly evident in the growing purchases of metals by ETF funds. Investments in silver have been growing for seven months in a row, the longest period since 2020,” wrote XTB analyst Jiří Tyleček to ČTK.
Source: Reuters
