Latest News

Silver surpasses $50; gold falls below $4,000/oz

Gold prices dropped over 1% Thursday, falling below $4,000/oz, which was breached in the previous session for the first. The dollar rose and investors took profits after a ceasefire agreement between Israel and Hamas. Silver prices rose for the first-time above $50 an ounce, boosted by the momentum in the gold markets, strong investment demand, and a persistent shortage of supply.

By 12:38 pm, spot gold had fallen 1.1%, to $3,993.41 an ounce. ET (1638 GMT). U.S. Gold Futures for December Delivery fell 1.6% to $ 4,006.40.

The U.S. Dollar Index was up 0.5%, hovering near a 2-month high. This made dollar-priced gold more expensive for foreign buyers.

Tai Wong is an independent metals dealer. "Speculators take some gold chips off of the table when the Gaza ceasefire comes into effect, since it lowers the temperature in this historically volatile area," he said. Israel and Hamas agreed to a ceasefire on Thursday, which is the first step in President Donald Trump's initiative for ending the Gaza war.

Overall, however, this trade's faith is not diminished. Wong stated that this rally was so rapid, no real support came in until $3.850. On Wednesday, the price of gold surpassed $4,000 an ounce for a first time, hitting a record-high $4,059.05. This non-yielding investment, which is traditionally used as a hedge in times of geopolitical or economic uncertainty, gained 52% so far this year.

The rally was fueled by geopolitical uncertainty, central bank purchases, ETF inflows on the rise, and expectations of U.S. interest rate cuts.

The minutes of the September meeting of the U.S. Federal Reserve, released on Tuesday, revealed that officials were in agreement about the risks to the U.S. employment market being high enough to warrant rate cuts, but they remained cautious due to stubborn inflation.

In September, the Fed began a new cycle of rate cuts. The benchmark rate was lowered by 25 basis points.

The traders are pricing in an October 25 basis point reduction and another for December with 95% and 80% chances, respectively.

Silver prices rose 1.3% to $49.49 an ounce.

The price of metals has increased by more than 70% in this year. This is due to the same macroeconomic factors that are driving the gold rally, and the tight supply on the spot market.

David Meger is the director of metals at High Ridge Futures. He said that silver was playing catch-up at this time, and has been moving up more than gold over recent sessions.

Palladium fell 1.2% and platinum 1.7%, respectively, to $1431.58. (Reporting and editing by Anushree mukherjee in Bengaluru, Kavya balaraman, and John Biju; Arun Koyyur and Kirby Donovan, David Gregorio).

(source: Reuters)