Silver prices outshine gold to hit seven-year high, Report

Silver prices outshine gold to hit seven-year high, Report
Silver prices outshine gold to hit seven-year high, Report

Gold surged to a nine-year peak on Wednesday as an escalation in U.S.-China tensions stoked demand for safety, while silver followed bullion’s rally to hit a near seven-year high on hopes for a recovery in industrial demand.

Spot gold hit its highest since September 2011 at $1,870.01, nearing its all-time peak hit the same month.

By 2:03 p.m. EDT (1803 GMT) spot gold jumped 1.3% to $1,865.61 per ounce, while U.S. gold futures closed 1.2% higher at $1,865.1 per ounce.

“Gold is accelerating higher and that’s been mainly on the geopolitical tensions with China. There seems to be no end in sight for this escalation … and it’s going to damage sentiment as the world’s largest countries continue to bicker,” said Edward Moya, senior market analyst at broker OANDA.

The United States ordered China to close its consulate in Houston, while a source said Beijing was considering shutting the U.S. consulate in Wuhan in retaliation.

The tit-for-tat between U.S. and China is likely to further deteriorate the global economic outlook as it reels under the impact of the pandemic.

Low interest rates and a wave of stimulus to cushion virus- hit economies have propelled prices of bullion, widely used as insurance against rising uncertainties, about 23% higher so far this year.

Silver rallied 6.4% to $22.68 per ounce, having hit its highest since October 2013 at $23.03.

Prices have risen over 17% so far this week, which some analysts see as the start of a bull run powered by low interest rates, resurgent investment demand, disrupted production and a recovery in industrial consumption.

“Silver shares some ‘safe haven’ attributes with gold but is inherently more leveraged to global growth and manufacturing recovery,” Citi Research wrote in a note.

A rebound in global PMIs, particularly in China, has accelerated the relative outperformance of silver versus gold this quarter, Citi added.

Palladium fell 1.3% to $2,129.25 per ounce and platinum rose 2.6% to $904.97 per ounce, having hit its highest since Feb. 27 at $918.38.


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