The recent rally in gold and silver prices has only gained pace, with last week in particular seeing some exceptional gains for both metals. The outbreak of the Israel-Hamas war has markets uncertain over how the conflict could unfold, if any other countries will be drawn into the war, and what effect this will have on inflation given oil and gas prices are rising.
After hitting $1,812 / £1,490 less than two weeks ago, gold has bounced back to trade at $1,938 / £1,590 today, a gain of 6.9% and 6.7% respectively in USD and GBP. The next key level to beat will be $1,950 / £1,600 per ounce. If this level can be breached with the kind of momentum seen last week then gold could easily test the all-time high in sterling.
Gold saw exceptional gains last week, rising by £100 per ounce in GBP.
Not to be outdone, silver saw even stronger gains in the same period, rising from £17.03 / $20.71 to trade at £18.96 / $23.11 at the time of writing, a gain of 11.3% and 11.5%. Silver has further to recover from its summer slump but is outperforming gold at its current pace.
All eyes remain on the Middle East, and escalation remains the chief concern. Iran have threatened to intervene in the conflict, and oil and gas prices are rising on supply disruption expectations. A summit of Arab leaders has already been cancelled following a blast at a Gaza hospital that has further raised tensions in the region overnight.
Outside of geopolitics, we are now two weeks away from the next interest rate decision from the Fed. Markets are unsure whether sticky inflation, and strong job and retail figures will prompt another hike, or if the risk of recession will give the Fed enough reason to hold.
With the geopolitical and economic outlook so uncertain, investors are turning once again to safe havens, and after building such a solid base price in the past three years, gold is well poised to test all-time highs as investors look to protect their wealth
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