Published on: 2024-05-20
Updated on: 2024-05-21
Gold and silver prices continued to go North on Monday, extending their surge from last week, after strategists said the precious metals could continue to hit fresh record highs over the coming months.
Bullion has been on an upward trend since late 2022 despite high interest rates and a relatively strong US dollar amid rising geopolitical tensions although underperforming its poorer cousin this year.
Silver prices have jumped around 32% to date and traded well above $30 that bullish analysts had forecast. The Danish bank said "year of the metals" theme built more momentum in recent weeks.
Back in January, the gold-silver ratio was above 90, the most stretched since Sep 2022. Now the indicator is down to about 75 which remains higher than the long-term average –a sign of more gains ahead.
The white metal is not only a safe-haven asset but a key ingredient in solar panels, and with robust growth in that industry, usage of the metal is expected to reach a record this year, according to the Silver Institute.
The market is headed for a fourth year in deficit, with this year's shortage seen as the second biggest on record. Over the next two years, the LBMA stockpiles may be depleted, according to TD Securities.
Silver is still far from its all-time high at nearly $50, unlike gold. It looks rather overbought, but in the medium term, the rally may not end until the next major resistance in the $35 area looms.
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