After a six-week bull run, gold and silver are still making gains, with gold continuing to set new records yesterday.
Gold’s meteoric rise has seen the metal pass an incredible $2,350 yesterday, setting a new intra-day all-time high of $2,365.70, with the metal up 15% in the past three months. In Euros gold has stabilised above €2,160, reaching a high of €2,177.97 per ounce.
Silver has also started to catch up with gold, bringing the gold-silver ratio down to 83 after hitting 90 at the start of April. Silver has now passed $28/€25.80 per ounce but is still a far cry from it’s all-time high of £48/€32.88 per ounce. As such, many investors see silver having the greater potential to climb much higher, and demand for silver has risen considerably in the past few weeks.
Gold’s gains are certainly helping to drive silver demand, but India also appears to be a key buyer of silver in 2024. Silver imports to India have climbed 260% in February compared to January, and the two months combined have already nearly equalled the entire import total for 2023. Much of the demand comes from industrial sources such as solar panels, but investment and jewellery demand is also growing in the country, helping to support silver as just the right time.
For gold, much of the demand is shrouded in mystery, but is most likely due to central bank buying. Investment demand has increased however, as investors see gold continuing to rise and seek to buy-in before missing out.
Economic and geopolitical factors are still in play however, and analysts believe there is further upside potential for gold and silver to come in the months ahead. Even today has seen China’s debt credit outlook downgraded following the collapse of its construction sector. The latest batch of US inflation data is also due later today and could cause some volatility if it suggests inflation is more stubborn than markets hope.
For gold then, $2,400/€2,200 are the next benchmark to pass, but $2,500/€2,300 by the end of year seems to be entirely plausible and could be reached quite quickly if the current pace of gains continues. For silver, $30/€26 would represent a significant milestone not seen in over 10 years.
