Analyst: gold price rose above $2400

22 May 2024 г. 5 minutes of reading

Adam Button, head of currency strategies at Forexlive.com, explained that this latest move is a continuation of a broader price rally fueled by the same source.

“This rally started in China and China continues to show it,” he believes, adding that the latest data shows that Turkey and much of the Middle East are also buying gold bullion. “If you're ‘bullish’, the image of Xi and Putin hugging is as good as it gets,” Button continued. “They're trying to create a multipolar world, and you can't do that if you rely on the U.S. dollar.”

Sean Lusk, director of commercial hedging at Walsh Trading, explained that a combination of high inflation, massive debt issuance and unchecked money printing by central banks is causing market participants to invest in precious metals and other commodities.

“We just printed too much money and now you see the result of that,” he said. “Where is all this money going? In addition to buying stocks, a lot of money is going into metals to hedge inflation. And it's not just us, but countries around the world are doing the same thing. They're accumulating foreign exchange reserves, and nobody knows where to put it.”

Lusk said he saw the entire commodities complex go up in flames last Friday. He expects metals prices to rise through the summer. “We're at $2,410 per ounce, we're back to the highs,” he said. “Here's silver starting to rise, copper as an industrial metal has also risen noticeably, as has platinum. It's really been one heck of a ride.”

Silver
The silver market is holding initial support above $31 an ounce, and one major bank believes the precious metal still has room to rise if momentum picks up, according to Kitco News.

Commodity analysts at Canadian bank TD Securities reiterated their bullish outlook for silver in a recent market review as physical demand continues to outpace supply.

Daniel Gali, senior commodity strategist at Canadian Bank, noted in his recent review that he is eyeing all-time highs for the “white precious metal.” “The last time silver broke through the $30 an ounce mark, it traded as high as $50 an ounce in less than ten weeks,” he wrote. “TDS is a long-term bull for silver as industrial demand is expected to create another significant shortage in the market.” In its report released last month, TDS Bank said rising demand could deplete significant surface inventories of the metal within 12 to 24 months.

Although silver has risen significantly in recent days, some analysts believe the market is just beginning to catch up with gold. Silver's recent outperformance in the precious metals market has pushed the gold/silver ratio to 75 points, the lowest level since December 2022. July silver futures were trading at $32.26 an ounce, down 0.52%. June gold futures were trading at $2,426.80, down 0.48%.