menu-control
The Jerusalem Post
The Jerusalem Post: Business and Innovation

Silver Surges by 5%, Gold Hits Another Historic Record High

 
  Silver Surges %5, Gold Hits Another Historic Record High (photo credit: SHUTTERSTOCK)
Silver Surges %5, Gold Hits Another Historic Record High
(photo credit: SHUTTERSTOCK)

Gold and silver prices surge as weak U.S. consumer confidence, Fed rate cut expectations, and strong seasonal demand drive safe-haven buying.

Gold (XAU/USD) reached a historic high of $2,657 on Tuesday, fueled by rising geopolitical tensions, expectations of U.S. Federal Reserve rate cuts, and weak U.S. economic data. This represents a 1.1% gain on the day. Silver (XAG/USD) has also surged, climbing nearly 5% to $32.22, continuing its strong upward trajectory. These price movements reflect increasing investor appetite for safe-haven assets amid a challenging global economic outlook.

Weak U.S. Consumer Confidence and Manufacturing Data

Recent U.S. economic data from September 24 underscored worsening consumer sentiment and a decline in manufacturing activity, both of which have further supported the rally in precious metal prices:

  • CB Consumer Confidence Index fell to 98.7, significantly below the forecasted 103.9, marking a sharp drop from 105.6 in the previous month. This highlights growing concerns about the economic outlook as inflation erodes household budgets.
  • The Richmond Manufacturing Index declined to -21, worse than the expected -13, indicating a slowdown in industrial activity.

These weak economic indicators increase demand for gold and silver, as investors seek stability amid rising economic uncertainty. With the U.S. economy showing signs of strain, both metals are serving as safe-haven alternatives to traditional currencies.

Fed Rate Cuts and Inflation Driving Gold and Silver Higher

Gold and silver prices are rising due to expectations of aggressive U.S. Federal Reserve rate cuts and growing inflation concerns. Following a 50 basis point cut, markets expect a total reduction of 125 basis points by the end of 2024, weakening the U.S. dollar and enhancing the appeal of non-yielding assets like gold and silver.

Lower rates reduce the cost of holding precious metals, while a weaker dollar makes them cheaper for foreign buyers. Additionally, U.S. PMI data shows inflation rising at the fastest pace in six months, further supporting demand for these safe-haven assets.

Featured Partner (Ad)

Request Your Free Gold Investment Educational Kit

Silver Surges on Strong Demand and Indian Import Duty Cuts

Silver prices have surged to $32.22 due to strong demand during India's festive and wedding season, a period typically marked by increased purchases of precious metals. Key factors driving this surge include:

  • The Indian government’s decision to reduce import duties on gold and silver from 15% to 6%, boosted demand.
  • Silver imports to India jumped from $158 million in August 2023 to $1.33 billion in August 2024.
  • Experts like Rajesh Rokde predict further price increases due to heightened consumer interest.

With over 3.5 million weddings expected this year, demand for both gold and silver jewellery is projected to rise by 25%, adding more upward pressure on prices.

Conclusion 

With rising inflation concerns, weak consumer confidence, and Fed rate cut expectations, investors closely monitor developments. Upcoming economic data could significantly influence market sentiment and drive precious metal prices.

Key events to watch:

  • September 25:
    • New Home Sales: Forecast at 699K, down from the previous 739K.
  • September 26:
    • Final GDP (Q2): Expected to hold at 3.0%.
    • Unemployment Claims: Forecast at 224K, up from 219K.
    • Core Durable Goods Orders: Expected to rise by 0.1% after last month’s -0.2% decline.

These reports will provide crucial insights into the health of the U.S. economy and, if weaknesses persist, could further boost demand for safe-haven assets like gold and silver.

Featured Partners (Ad)

Augusta Precious Metals

Fees:

$0 (10 Years)

Minimum:

$50,000

"Best Overall" by Money Magazine, Award-Winning for 6 Years, Thousands of 5-Star Rankings

Expand DetailsRenowned for its exceptional customer service and commitment to transparency, Augusta Precious Metals has garnered numerous accolades, including "Best Overall" from Money magazine and "Most Transparent" from Investopedia. The company's dedication to educating and supporting its clients has earned it top ratings from organizations such as A+ from BBB and AAA from BCA.

Goldco

Fees:

Vary

Minimum:

$25,000

Industry leader with over $2 Billion in gold and silver. Top rated precious metals company with buy back guarantee

Expand DetailsFrom Precious Metals IRAs to direct purchases of gold and silver, Goldco have helped thousands of Americans place over $2 Billion in gold and silver. TOP-RATED PRECIOUS METALS COMPANY Rated A+ by the Better Business Bureau Rated Triple A by Business Consumer Alliance Earned over 6,000+ 5-Star Customer Ratings Money.com 2024 Best Customer Service 2024 Inc. 5000 Regionals: Pacific Ranked #17 2024 Gold Stevie Award, Fastest Growing Company Inc. 5000 Award Recipient, 8+ Years

Birch Gold Group

Fees:

Vary

Minimum:

$10,000

Since 2003 BGG served over 32,000 customers. A+ rating with BBB, AAA from BCA & has multiple celebrity endorsements

Expand DetailsBirch Gold Group is a leading precious metals dealer established in 2003. They empower customers with education and prioritize customer satisfaction. Their experienced team offers gold, silver, and other metals for investment and IRAs. With a strong reputation (A+ BBB rating) and focus on personalized service, they aim to be your trusted partner in securing your financial future through precious metals.

This article is for informational purposes only. The opinions and analysis herein are those of the author and are not financial advice. The Jerusalem Post (JPost.com) does not endorse or recommend any investments based on this information. Investors should consider their financial situation, investment goals, and risk tolerance before making any decisions. Consulting a qualified financial advisor is recommended. JPost.com is not liable for any investment losses from using this information. The information provided is for educational purposes only and should not be considered as trading or investment advice.

×
Email:
×
Email: