Gold at highs, but silver and mining companies also notable
Stable value
Posted by MoneyController on 01.10.2024
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The price of gold continues to rise, breaking one record after another. This great success of the yellow metal, however, has not yet been fully priced in some market segments. Meanwhile, silver is also going through a bullish phase.
What are the factors that have pushed the price of gold so high so far? As Sissi Bellomo explains in ‘Il Sole 24 Ore’, they range from massive purchases by central banks (e.g. from China) to the current interest rate cut by first the European Central Bank and then the Federal Reserve. Another reason lies in the ‘momentum’ of gold itself, which is driving many investors to bet on the precious metal.
As stated in an article on the ‘Lamiafinanza.it’ portal, the rise in the value of gold has not yet translated into a rise in the prices of gold mining stocks of the same proportions. Scotiabank, for example, estimates that the price of those stocks is on average 23% off when compared to the record gold price.
As one can read further on ‘Lamiafinanza.it’, it cannot be ruled out that investors in Western countries will also return to gold in the face of growing uncertainty about the trajectories of the US and European economies. In this case, investors could seek exposure to the precious metal, either by purchasing physical gold, by buying shares in passive funds, or by investing in gold mining stocks.
In addition to gold, silver is also going through an upward phase that, in percentage terms, is even greater than that of gold. As Jinjoo Lee points out in the ‘Wall Street Journal’, silver is not only sought after by investors because it is considered a precious metal: silver today can also count on a growing demand due to its industrial uses, as in the case of solar panels: according to data from the Silver Institute, precisely from the solar panel sector the demand for silver has grown by 158% from 2019 to 2023 (data confirmed, Lee explains, also by research by Citi).
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