Gold
and
silver
bars
of
various
sizes
lie
in
a
safe
on
a
table
at
the
precious
metals
dealer
Pro
Aurum.
Sven
Hoppe
|
Picture
Alliance
|
Getty
Images
Gold
prices
have
been
rallying
to
record
highs,
with
spot
gold
notching
a
new
top
of
$2,449.89
per
ounce
on
Monday.
Silver
too
hit
multi-year
highs
earlier
last
week,
as
did
industrial
metal
copper.
While
all
three
are
off
their
perch
currently,
they
are
still
trading
hovering
near
record
highs,
with
analysts
expecting
prices
to
strengthen
over
the
next
12
months.
What
will
drive
the
rally
in
precious
as
well
as
industrial
metals?
Spot
gold
is
currently
trading
at
$2,351.3.
Prices
of
the
yellow
metal
have
sustained
their
upward
momentum
amid
a
renewed
weakness
in
the
U.S.
dollar
and
retreating
U.S.
Treasury
yields,
ANZ
said
in
a
recent
note.
But
that’s
not
all.
“While
geopolitical
risks
continued
to
bolster
haven
demand,
an
impressive
rise
in
China’s
gold
demand
in
Q1
2024
has
largely
fueled
the
price
rally,”
ANZ’s
strategists
wrote.
China
is
currently
the
leading
consumer
demand
for
bullion,
after
the
country
overtook
India
in
2023
to
become
the
world’s
largest
buyer
of
gold
jewelry.
Chinese
consumers
have
also
been
at
the
forefront
of
gold
purchases,
buying
603
tons
of
gold
jewelry
last
year,
a
10%
jump
from
2022,
data
from
the
World
Gold
Council
showed.
The
WGC
expects
Chinese
jewelry
demand
to
stay
at
elevated
rates
this
year,
or
even
higher
compared
to
2023.
UBS
strategists
in
a
note
last
week
raised
their
forecasts
for
gold
to
$2,500
per
ounce
by
the
end
of
September,
and
$2,600
by
year-end.
The
bank’s
bullish
outlook
is
owed
to
stronger
Chinese
demand,
on
top
of
a
series
of
soft
U.S.
data
in
April,
which
has
driven
some
repricing
of
expectations
for
U.S.
Federal
Reserve
rate
cuts.
Higher
rates
tend
to
pressure
gold
as
they
make
Treasuries
—
also
a
safe-haven
asset
—
a
more
attractive
option
for
investors.
“We
think
gold
can
continue
to
make
new
highs,”
UBS’s Precious
Metals
Strategist Joni
Teves
told
CNBC’s
“Street
Signs
Asia”
on
Monday.
Gold’s
‘poorer
cousin’
What
about
gold’s
poorer
cousin,
silver?
While
silver
tends
to
play
“second
fiddle”
to
the
yellow
metal,
the
two
share
a
positive
correlation
when
it
comes
to
prices,
albeit
with
a
lag
on
silver’s
part.
“Silver
has
been
arguably
even
more
interesting
–
finally
it
managed
to
enjoy
some
decent
catch
up
with
gold,”
Nikos
Kavalis,
managing
director
at
precious
metals
research
consultancy
Metals
Focus,
told
CNBC
via
email.
He
elaborated
that
as
the
market
gets
more
comfortable
and
convinced
of
gold’s
bullish
run,
more
of
these
investors
are
turning
to
silver.
Silver
rallied
past
$31
per
ounce
to
over
a
decade
high
last
Wednesday
amid
surging
investor
interest
and
supply
challenges.
It
is
currently
trading
at
$31.6
per
ounce.
Lines
of
new
Ford
Fiesta
automobiles
in
a
lot
at
the
Ford
Motor
Co.
plant
in
Germany. Silver
is
used
extensively
for
industrial
purposes
and
commonly
incorporated
in
the
manufacturing
of
automobiles,
solar
panels,
jewelry
and
electronics.
Alex
Kraus
|
Bloomberg
|
Getty
Images
“We
think
[silver
is]
actually
the
best
placed
precious
metal
to
really
benefit
from
higher
gold
prices.
There’s
a
very
strong
correlation
there,”
said
Teves.
She
added
that
when
the
Fed
eases,
silver
is
in
a
“good
position
to
really
outperform
gold,”
especially
as
supply
and
demand
fundamentals
remain
tight.
“Slower
mine
production
growth
and
strong
industrial
demand
suggest
supply
is
lagging
demand,
which
will
keep
the
market
in
a
structural
deficit,”
said
Daniel
Hynes,
senior
commodity
strategist
at
ANZ.
Silver
is
used
extensively
for
industrial
purposes
and
commonly
incorporated
in
the
manufacturing
of
automobiles,
solar
panels,
jewelry
and
electronics.
Metal
Focus’
Kavalis
said
that
other
precious
metals
like
platinum,
palladium
and
rhodium
are
all
in
deficits
this
year,
and
hence
should
see
supportive
prices.
Copper
climbed,
then
crawled
Copper
too,
recently
had
its
shining
moment,
hitting
an
all-time
high
of
$10,857
per
ton
last
Tuesday
before
tapering
off.
It’s
currently
trading
at
$10,256
per
ton.
Prices
of
the
red
metal
have
been
“well
supported
by
supply
tightness”
this
year,
said
ANZ,
as
supply
constraints
mount.
The
International
Copper
Study
Group
(ICSG)
has
slashed
its
supply
surplus
forecasts
for
the
metal
this
year
due
to
lower-than-expected
production.
Last
November,
First
Quantum
Minerals
halted
production
at
its
Cobre
Panamá
copper
mine,
one
of
the
world’s
largest,
following
a
Supreme
Court
ruling
and
nationwide
protests
over
environmental
concerns.
Anglo
American,
a
major
producer,
said
it
would
cut
copper
output
in
2024
and
2025
as
it
seeks
to
cut
costs.
We
still
firmly
believe
that
copper
is
on
a
path
to
$12k/t,
and
$15k/t
in
our
bull
case
over
the
next
12-18
months.
“Robust
gains
for
industrial
metals
and
the
precious
metals
complex
are
underpinning
financial
and
physical
inflows
and
bullish
sentiment,”
Citi
strategists
said
in
a
note
earlier
this
month,
adding
that
it’s
a
“bullish
world
for
metals.”
The
investment
bank’s
base
case
now
is
for
consolidation
in
copper
prices
over
the
next
three
to
six
months,
but
believes
that
copper
still
has
room
to
rally
further,
depending
on
the
degree
of
the
Fed
easing
and
the
global
manufacturing
recovery.
“We
still
firmly
believe
that
copper
is
on
a
path
to
$12k/t,
and
$15k/t
in
our
bull
case
over
the
next
12-18
months,”
Citi’s
strategists
said.
