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Gold futures witnessed another surge, reaching a new record high at the end of the week, while silver saw its highest settlement since February 2013, after a four-day 10% rally.
Analysts attribute the year-to-date gains in precious metals to anticipation of potential interest rate cuts by the Federal Reserve in the coming months.
Chris Gaffney, president of World Markets at EverBank, noted that lower interest rate expectations bolster both gold and silver prices due to their non-interest bearing nature.
Gaffney indicated that while silver, classified as an “industrial precious metal,” tends to outperform gold during periods of global economic robustness, geopolitical tensions or economic downturns could propel gold ahead.
Front-month Comex gold for May delivery surged by 1.9%, closing the week at $2,412.20/oz, while front-month May Comex silver settled at +9.8%, reaching $5.05/lb – a historical high for U.S. copper futures.
The NYSE Arca Gold Miners Index has seen a YTD gain of 14.3%, almost on par with the 17% rise in gold futures for the year.
Amid rising production costs and stabilized costs post-pandemic, mining companies stand to generate substantial free cash flows, with potential optimistic stock reactions, according to insights from Gabelli Gold Fund portfolio manager Chris Mancini.
This week showcased remarkable performance by precious metals miners, with stocks such as Platinum Group Metals, Novagold, Endeavour Silver, and Hecla Mining registering notable gains.
