Gold and silver prices have surged to record highs as fears of escalating conflicts in the Middle East, uncertainties surrounding the upcoming US election, and easing cycles from central banks drive demand for safe havens.
Analysts predict that gold prices will continue to rise, News.Az reports, citing foreign media.
Precious metals, particularly gold and silver, surged to new record highs as demand for safe havens increased due to global economic uncertainties, the ongoing conflict in the Middle East, and a tight race in the US elections.
Meanwhile, major central banks worldwide have largely begun easing monetary policy and cutting interest rates, with gold responding strongly to decisions by the US’s Federal Reserve.
On Monday, the People’s Bank of China (PBOC) cut its benchmark mortgage rates by more than expected in a bid to boost the economy, driving commodity prices, including gold and silver, higher.
The spot gold price rose by 0.32% to $2,730 per ounce, while gold futures on the Comex climbed 0.59% to $2,746 per ounce as of 6:46 am CET, both reaching new record highs for the fourth consecutive trading day. Silver futures soared by 3.12% to $34.30 per ounce, also hitting a new record.
In fact, both gold and silver prices surged on Friday when PBOC Governor Pan Gongsheng spoke at a financial forum, indicating that the benchmark lending rates would be reduced by 0.2% to 0.25%.
He also noted that the reserve requirement ratio (RRR) – the amount of cash banks must hold – would be lowered by a further 0.25% to 0.5% by the end of the year.
Precious metal prices do not typically respond to China’s monetary policy. However, the movements may suggest that investors tend to react to any banks’ rate-cutting decisions as falling interest rates make it less costly to invest in precious metals during times of uncertainty.
In September, the PBOC unexpectedly cut the RRR by 0.5%, followed by a broad package of stimulus measures, including rate cuts, direct cash injections into the stock market, and reduced down payments for homebuyers, a week after the Federal Reserve enacted its significant 0.5% rate cut in September.