Gold adn Silver prices Surge too Historic Highs as Rate Cut Expectations Rise
NEW YORK – Gold and silver are experiencing a dramatic price rally, reaching levels not seen in history as investors anticipate potential interest rate cuts and seek safe-haven assets amid ongoing economic uncertainty. Gold is poised to reach $4,200 per ounce by year-end, according to a new report from UBS, while silver closed at $48.53 per troy ounce on Monday – surpassing its previous record of $48.41 set in April 2011.
Thes unprecedented gains reflect a confluence of factors. Gold, a non-yielding asset, traditionally strengthens when interest rates are low and economic conditions are unstable. Investors are currently pricing in a 25 basis point rate cut at teh upcoming Federal Reserve meeting, with expectations for an additional 25 bps reduction in December. This shift in monetary policy outlook, coupled with broader economic anxieties, is driving demand for precious metals. Some funds are even believed to be actively pushing prices higher, according to a quote from Meir reported by Reuters: ”some of the funds might try to push the price to reach that number.”
UBS’s report cites “strong basic and momentum reasons” for the continued gold rally. Silver’s surge, which saw a 3.3% increase over two consecutive days, briefly touched an intraday high of $48.76 on Monday - the highest level in over 14 years, though still shy of its all-time intraday record of $49 in April 2011. The price movements impact investors, commodity markets, and potentially broader economic indicators as these metals are used in industrial applications as well as serving as stores of value.