Gold (GC=F) rose close to $5,000 per ounce on Friday while silver (SI=F) touched $100 in what has been an epic rally for precious metals.
Bullion is headed toward its best week since 2020, gaining 13% year-to-date. Goldman Sachs noted private sector investors have been getting in on the epic rally in addition to central banks’ accumulation of gold.
Strategists cite a weaker US dollar, expectations of Federal Reserve easing, large fiscal deficits, and fading demand for government debt.
Earlier this week a Danish pension fund said it would exit US Treasurys amid President Trump’s pursuit for Greenland. Meanwhile Reuters reported that big Northern European investors are also assessing US assets in the face of geopolitical tensions.
“The cat is out of the bag,” wrote Ole Sloth Hansen, head of commodity strategy at Saxo Bank on X.
“One of the key reasons gold has been accumulated for months — and is likely to remain in demand — is the steady erosion of fiscal discipline in the United States,” he added.
Silver futures have had an even bigger run than gold, up 29% year-to-date. Much of the metal’s supply is used for industrial purposes.
China has been hoarding silver for its own domestic use, restricting exports since the start of the year.
“Silver prices have already significantly overshot our forecasted averages, though calling a top is close to impossible in markets displaying near-parabolic price momentum,” JPMorgan analysts noted last week.
Mike McGlone, senior commodity strategist at Bloomberg sees parallels with rapid price moves in 1979 and 1980 that were followed by a crash.
“Momentum is on pace for $100, but if the commodity lives up to its reputation as the ‘devil’s metal,’ silver can rapidly retrace toward $50 and, in the process, put in a peak that lasts years,” said McGlone.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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