On one hand, gold prices are also increasing and on the other hand, silver has touched a record high level. The biggest reason for this is the increasing geopolitical tension in the world. The US Federal Reserve is expected to reduce interest rates next year. On Monday, the price of silver increased by 0.6% to about $ 67.55 an ounce. The supply in the market has reduced since the big short squeeze in October. The trading volume of silver futures on China’s Shanghai Exchange has also increased rapidly this month, which shows strong market interest.
At the same time, the price of spot gold reached approximately $ 4,365 per ounce, which is just $ 20 away from the all-time high. Gold has been rising continuously for the last two weeks. According to the report of Moneycontrol, traders expect that the Fed may reduce interest rates in America twice in 2026. At the same time, US President Donald Trump is also in favor of sharp rate cuts. Metals like gold and silver get the benefit of low interest rates, because they do not earn interest on keeping them and investors are more attracted towards them at that time.
Why increased investment in gold and silver?
Geopolitical circumstances are also making precious metals a safe investment destination. The US has tightened the oil blockade against Venezuela, increasing pressure on the government of President Nicolas Maduro. Meanwhile, for the first time, Ukraine has attacked an oil tanker belonging to Russia’s “Shadow Fleet” in the Mediterranean Sea. These incidents have increased global tension and investors are moving towards safer options like gold and silver.
This year has been historic for precious metals. Both gold and silver are on track for their strongest annual gains since 1979. The price of silver has more than doubled this year, while gold has increased by almost two-thirds. The main reason for this is the heavy purchases by central banks and increasing investments in gold-based ETFs.
Goldman Sachs told how much will prices increase?
According to Bloomberg data, gold-based ETFs have been inflowing continuously for the last five weeks. Information from the World Gold Council shows that investment in these funds has increased every month throughout the year except May. On the other hand, silver prices have strengthened recently due to strong demand, lack of supply and disturbances in major trading markets.
Goldman Sachs analysts say that gold may go up further next year. According to him, gold is likely to reach around $4,900 per ounce and there are chances of it increasing even more. According to the report, ETF investors are now competing with central banks for limited bullion.
Silver price rose 0.5% to $67.46 an ounce in Singapore on Monday morning. Spot gold also rose 0.5% to near $4,363 an ounce, which is not far from the October record. Besides, there was also a rise in platinum and palladium, while there was not much change in the Bloomberg Dollar Spot Index.
