Gold prices could see more new highs. The gold market is poised to end the week with another all-time high. While there are risks of a near-term correction, some analysts believe this could still be the beginning of a broader rally.
Both gold and silver are experiencing another breakout after a brief consolidation period. Through August, gold prices were capped just below $2,550 an ounce, but that resistance has been broken. December gold futures are currently trading at $2,606.90 an ounce, up 3.2% from last Friday.
Silver has seen an even more impressive rally, with prices pushing back above $31 an ounce. December silver futures last traded at $31.13 an ounce, up nearly 10.5% from last week.
In a comment to Kitco News, Ole Hansen, Head of Commodity Strategy at Saxo Bank, described the rally as a coiled spring that has finally popped. He added that the economic data supports lower interest rates, not just from the Federal Reserve, but globally.
Many analysts have noted that falling global real yields, as central banks cut interest rates, will provide significant tailwinds for both gold and silver.
Hansen also said that gold’s breakout is being supported by silver’s breakout.