Precious metal prices soar: gold surpasses $3,500
Silver is also skyrocketing, reaching 14-year highs.
BarcelonaPrecious metals hit record highs. The price of an ounce of gold—a benchmark safe-haven asset—reached a new all-time high early Tuesday morning: $3,508.54, equivalent to €3,014.51. As usual, it eased slightly throughout the day, to $3,477, but by mid-afternoon it had regained its high, surpassing $3,515. This year alone, an ounce of gold has appreciated by more than 40%.
The reason for this historic rise is investor uncertainty over a US federal court's decision to declare illegal most of the tariffs imposed by US President Donald Trump, and which the White House itself has already announced it will appeal to the Supreme Court. Likewise, the devaluation of the dollar and doubts surrounding the Federal Reserve's independence in the face of pressure from Trump and the prospect of interest rate cuts are also motivating investors to seek refuge in gold, which has historically been a safe haven when the economic situation is uncertain.
As Andreu Cabot, economist and member of the board of directors of the Spanish Institute of Analysts, explained to ARA Cirus, "the current situation of geopolitical tensions, the risks of loss of market value of fixed-income assets due to the deterioration of the credit quality of issuers relative to the Fed are leading to an increase in demand for precious metals."
In fact, markets expect the Federal Reserve to cut interest rates by 25 basis points on September 17th, as shown by the CME Fedwatch Index, which predicts this option with an 89.8% probability, compared to 10.2% who maintain it at 4.50%. A rate cut implies a fall in the price of money, so buying gold bars requires more dollars, indicating that gold and the dollar have an inverse correlation and, therefore, a tight monetary policy puts pressure on the metal market.
Silver, at its highest level since 2011
The price of silver has risen more than 5% since the start of the week and reached a record high of $40.85 this Tuesday, breaking its fourteen-year record set in September 2011. In fact, silver has already accumulated a 48% appreciation since the beginning of the year, 40% to $28.90 per ounce.
Although the reason for silver's appreciation in the markets is the same as for gold—uncertainty in the US—it is worth noting that silver is a comparatively smaller market, which makes it susceptible to rapid and more abrupt price fluctuations. Moreover, unlike gold, silver is still trading below its all-time high of $50 an ounce set in 1980.
"Gold's long-term trend remains intact," says analyst Cirus Andreu, "and could see gold surpass $50. It's worth remembering that gold and silver are investment assets that retain their real economic value in difficult circumstances," he notes.
