Gold has recently soared to record highs, driven by expected U.S. interest rate cuts, with the current price settling around $2,178 per ounce. Analysts suggest that with investors preparing for eventual rate cuts, given improving economic conditions, the gold rally might continue. Even so, it’s a mistake not to pay close attention to gold’s “poorer cousin,” silver. Although not as renowned as gold, silver typically follows the same trajectory, albeit on a delayed schedule. Investors are advised to keep a close eye on job and inflation indicators as well as the actions of the Fed.
Central Banking Headwinds Could Be Playing a Role
According to Federal Reserve Chair Jerome Powell, inflation is near where the central bank may consider cutting interest rates. Considered a safe bet in times of uncertainty, gold has surged despite the strong U.S. dollar and high interest rates. Traditionally, investors move away from gold when rates are low. However, gold’s value depends on other factors, such as inflation and job growth. The success with which the central banks can keep inflation under control and how they respond with interest rate cuts, along with these other economic factors, may affect future gold prices.
Best To Consider Alternative Metals Instead?
When analysts talk about silver, they point out that it’s an industrial as well as a precious metal. Silver is used in the manufacture manufacturer panels, jewelry, and automobiles. The Silver Institute forecasts that global demand will reach 1.2 billion ounces this year. If true, this would be the second-highest level in history. Currently, silver prices are at an affordable $24.36 per ounce, and analysts believe that if global growth rises, it may outperform gold over the second half of this year due to silver’s many industrial uses. With the economic situation improving in the U.S. and elsewhere, all that glitters may not be gold—it may be silver.
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