Gold is breaking records almost every day now. Prices just do not seem to stop. On Wednesday, gold crossed $5,200 for the first time ever. Soon after that, it moved past $5,300. This has never happened in history. The rally is still strong and investors are watching closely.
Silver is also making headlines. On the COMEX market, silver crossed $116 for the first time ever. This new record shows how strong demand has become. Many traders say silver is finally catching up with gold.
Oil prices are moving higher too. Prices jumped more than 1 percent. They are now at their highest level in over four months. A powerful winter storm in the US disrupted oil production. Refineries were affected as well. This created supply worries and pushed prices up.
The US dollar is adding to the tension. It has fallen to a four year low against major currencies. Investors are worried about the direction of US policies. Because of this, metals across the board are seeing higher trading activity.
Markets are also waiting for an important decision. Investors are closely watching the US Federal Reserve. Its two day policy meeting ends later on Wednesday. Many expect signals on future interest rate cuts.
Gold demand is rising fast. Investors see gold as a safe place for their money. Concerns over the stability of the US dollar are growing. Questions around the independence of the Federal Reserve are also increasing fear. All this is pushing more money into gold.
On Wednesday, the dollar stayed weak even after President Donald Trump played down its fall. A weaker dollar makes gold cheaper for buyers outside the US. This increases demand further.
Gold has already risen more than 20 percent since the start of this year. This comes after strong gains last year as well. Analysts at Deutsche Bank believe gold could reach $6,000 an ounce this year. They say steady investment demand is driving this outlook.
Market experts say gold is back in the spotlight. Some feel the excitement has come late. New investors may be joining after prices have already surged.
Silver is facing similar discussions. There is strong industrial demand. Supplies are tight. Some shortages are starting to disrupt the market. This is adding fuel to the rally.
On COMEX, gold was trading near $5,286 per ounce, up over 3 percent. Silver was up more than 7 percent at around $113.80. Earlier, silver touched a record high of $116.11.
Oil prices are also seeing a shift in trend. Crude reached its highest level since late September. The winter storm knocked out around 15 percent of US oil output for a short time. Exports from Gulf Coast ports even fell to zero on Sunday before recovering on Monday.
Production issues in Kazakhstan are adding more pressure. Recovery at the Tengiz oil field may take longer than expected. This has raised supply concerns again. At the same time, Kazakhstan’s main export pipeline has fully restored loading operations.
West Texas Intermediate crude was trading near $63.12 per barrel, up 1.2 percent. Brent crude was around $67.15 per barrel, up nearly 1 percent.
Base metals are also rising. The weak dollar is making them more attractive to global buyers. Investors are uneasy about unpredictable US policies. Even though Trump says the dollar is doing fine, many analysts believe its weakness is not over.
Long term worries are weighing on the dollar. These include rising budget deficits, political tension, and concerns over fiscal discipline. Because of this, some investors are becoming cautious and taking profits.
Uncertainty around US interest rates is also adding pressure. Global tensions involving Iran and Venezuela are not helping either. All eyes are now on the Federal Reserve’s next move.
Goldman Sachs has warned that the base metals rally may slow down. Prices are high, but demand from manufacturers is weakening. This is especially true in China. Order books for copper fabricators have dropped sharply. Even demand from power grid projects is slowing.
Goldman Sachs has raised its aluminum price forecast. It now expects aluminum to average $3,150 per ton in the first half of the year. This is higher than earlier estimates but still below current prices.
On the London Metal Exchange, copper was trading near $13,165 per ton. Aluminum was around $3,289 per ton, both posting solid gains.
