Precious metals update
On Thursday, gold finally managed to break out of its month-long trading range as it surged above $2,530. It built on those gains on Friday to close at a new all-time high just under $2,580. It was firmer again overnight, although it had shed its gains at the time of writing. Time will tell whether the pull-back is simply a round of profit-taking or the beginning of a more protracted sell-off. Silver was also on a tear last week. Having started last Monday’s session below $28.00, buyers turned up to push it within a few cents of $31 by Friday’s close, an overall gain of 11%. It briefly topped $31 this morning, but, like gold, has since pulled back from its best levels. The sharp drop in the US dollar has helped both metals push higher. But, as with equities, where gold and silver go next, at least in the short term, will come down to Wednesday’s rate decision from the US Federal Reserve. This, along with the FOMC’s forecasts for inflation and the Fed Funds rate in its quarterly Summary of Economic Projections, has the potential to trigger a sharp rise in volatility for both metals.
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