Gold and silver have pushed through their recent trading ranges and now look set to test their recent highs – with gold eyeing record levels and silver targeting prices not seen in years.
Both metals hit three-week peaks today, with buyers stepping in despite the current appetite for riskier assets following talk of a $2,000 US stimulus package.
The continued demand for precious metals alongside risk assets suggests investors want exposure to both.
The Federal Reserve’s policy stance continues to favour precious metals. The CME FedWatch tool shows traders expect a 64% chance of another quarter-point rate cut at the December 10th Fed meeting. That would be the third straight reduction after cuts in September and October. Several Fed officials are speaking this week, which could give markets a better sense of where interest rates are headed.
With easy money policies expected to continue and steady demand from physical buyers, the fundamentals remain strong for gold and silver. Barring any major shifts in these, both metals look likely to move higher over the coming weeks.
