Gold, Silver, and Copper Rally: End of Upward Momentum or Temporary Pause Before Further Gains?

Vikki Zhao

 

PUBLISHED June 3, 2024, 2:39 PM EST. 3 min read.

Gold, silver, and copper have been in the spotlight in the commodity markets in recent weeks, with prices of these three commodities hitting record highs amid sustained investor interest. However, this week saw a pause in the gold, silver, and copper markets. Does this pause signal the end of the rally or a potential price correction? Or is it merely a temporary consolidation before further upward movement?

Gold prices retreated after reaching historic highs last week. Amid geopolitical tensions and new expectations of Fed rate cuts, gold surged to a record high of $2,449.95 per ounce on May 20th. Despite mixed signals from inflation data, gold still saw significant gains. However, weak April retail sales data, coupled with Fed officials expressing a more hawkish stance, led to a slowdown in gold’s record-breaking rally, with prices dropping approximately 5% over the following three days. The recent recovery in gold prices has left investors pondering whether the upward trend has truly ended or if there’s still room for further gains.

Silver, not far from its highest levels since 2013, has been another precious metal making significant gains in recent weeks. On May 20th, silver hit a multi-year high of $32.491 per ounce, echoing the upward trajectory seen in gold. With growing recognition of silver’s industrial applications beyond traditional precious metals, analysts increasingly view silver as a more attractive investment option. Factors such as increasing industrial demand in sectors like solar panels, electronics, and electric vehicles, combined with limited supply, could provide a compelling case for potential price increases in silver.

Copper, the latest industrial metal to reach historic highs, saw prices surge to new records on May 20th. Concerns about potential supply tightness have intensified, with the International Copper Study Group (ICSG) recently lowering its supply forecasts, indicating a tighter market than previously anticipated. With expectations of increased demand for copper in the coming years, particularly in industries focusing on renewable energy and electric vehicles, copper’s upward trajectory may continue, albeit with some short-term pressures. Factors such as potential Fed rate cuts stimulating economic activity and a strong rebound in global manufacturing could further bolster copper prices in the months ahead.

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