Precious Metals Continue to Rise, and Silver Prices Are Expected to Rise in the Next Three Months
Driven by expectations of further interest rate cuts from the Federal Reserve, precious metal prices have surged, with silver reaching its highest level since 2012. On Thursday, September 26 (local time), silver prices rose by 2.8%, hitting $32.71 per ounce, marking a 37% increase year-to-date.
Prior to this, precious metal prices had generally risen, with gold reaching a new all-time high. On September 26, gold prices surpassed the $2,680 mark, peaking at $2,686 per ounce. Several Wall Street investment banks have set a target price of $2,700 for this year or the first half of next year, with some even projecting $3,000.
Silver has been one of the best-performing major commodities this year, benefiting from the Fed’s shift to a more accommodative policy and the prospect of further rate cuts. As China implements measures to boost its economy, the industrial demand for silver is likely to increase, supporting its price rise.
Amelia Xiao Fu, Head of the Commodity Market at Bank of China International, stated, “Due to continued rate cuts and potential sustained stimulus measures in China, silver is expected to keep rising over the next few quarters. We anticipate silver prices to approach the $37 level.”
Ole Hansen, Head of Commodity Strategy at Saxo Bank, stated, “Silver is perceived as a relatively cheap counterpart to gold. As gold prices continue to set new records and copper reaches a two-and-a-half-month high, traders are pushing silver above the $32.50 resistance level. China’s stimulus measures are boosting industrial metals, which is exactly what silver traders have been waiting for. The sustained strengthening of gold, coupled with industrial metal prices stabilizing at higher levels, should lead to silver outperforming gold.”
Citigroup analyst Max Layton noted, “Interest rate cuts should provide bullish momentum for global economic activity and support silver consumption. We expect silver prices to rise to $35 within the next three months and to $38 within the next 6-12 months.”
Carsten Menke, an analyst at Julius Baer, believes that in the medium to long term, silver’s performance will primarily depend on gold, rather than any specific dynamics within the silver market.
Additionally, funds flowing into silver-backed exchange-traded funds (ETFs) are showing signs of recovery. Silver is one of the most widely used commodities, second only to oil, with over 10,000 applications worldwide. In 2023, the silver market is projected to have a supply gap of 15%, with an accumulated gap of 1.0934 billion ounces anticipated from 2020 to 2024. Despite recent increases, silver prices remain significantly below the nearly $50 historical high set in 2011.
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