Silver Rebounds from $2 Weekly Plunge, Gold Price Near Record Friday Finish
Friday, 5/12/2023 15:22
SILVER and GOLD prices both rallied from sharp falls in London trade Friday, recovering from 6-week and 1-week lows respectively in Dollar terms as the US currency trimmed its strongest gain in 3 months and Western stock markets also bounced with bond prices.
Gold dropped near $2000 per ounce before regaining $17 to set its 3rd highest-ever Friday finish in London in Dollar terms while edging a new record weekend level in Euros above €1855.
The
silver price had earlier fixed at midday around $23.85 per ounce – down $1 from noon Thursday and $2 below last Friday's London benchmarking to show its steepest weekly plunge since October.
Silver then reduced that 7.7% week-on-week price drop, rising back to $24 in spot
bullion trade.
The
Dollar Index meantime held on track for its sharpest week-on-week rise since mid-February, when minutes from that month's Fed rate-rise meeting backed what chairman Jerome Powell had said after that decision, that "ongoing [interest-rate]
increases will be appropriate [and] I don't see us cutting rates this year."
While all-but 0.2% of betting on year-end Fed futures still sees the US central bank cutting rates by Christmas, the consensus forecast according to the CME derivatives exchange's
FedWatch tool has now risen to 4.49%, up nearly 10 basis points from last weekend and sharply above the 1-month low of 4.19% set on Thursday last week.
That day saw gold prices spike to a new spot-market record of $2078 and silver touched a 13-month high at $26.14 per ounce after the Fed raised rates to a ceiling of 5.25% but said
monetary policy will now be "data dependent".
"Precious metals and especially silver [have]
near-perfect conditions for the ongoing bull market," said analysis from US financial giant Citi as silver hit $26 per ounce in mid-April, projecting another 18% jump to $30 per ounce "in the coming months."
With silver's year-to-date average rising 6.3% so far from 2022's annual price amid the US regional bank and Credit Suisse crisis, "There's
a lot more room to run," said Mike DiRienzo, executive director of industry association The Silver Institute earlier this week, but for global demand, "It's going to be hard [for 2023] to get to last year's record level."
"As of now, we’re getting a much-needed pullback, but
everything is pointing up medium term/long term in gold and silver," said US coin and bar retailers Sprott Money amid Thursday's plunge.
Euro gold prices today rose towards a record-high Friday finish above €1855 per ounce as new data said annual inflation in France and Spain last month came in as analysts forecast at 6.9% and 4.1% respectively.
The
UK gold price in Pounds per ounce also rose, recovering a dip below £1600 to head for its 4th highest-ever weekly finish at £1612 after the Office for National Statistics said the UK economy shrank 0.3% in March but grew 0.1% across the first quarter of 2023 as a whole.
With the European Central Bank's Christine
Lagarde repeating yesterday that inflation across the 19-nation Eurozone remains "too high for too long", the Bank of England forecast on Thursday that UK inflation – currently running in double digits – won't fall to its 2.0% target
until 2025.
Following yesterday's UK rate hike, both the BoE and the ECB have now raised the cost of borrowing to the highest since 2008 at 4.50% and 3.75%.
With US rates now rising from 0% at the start of 2022 to the highest since 2007 at 5.25%, "The
banks that have failed have had some very unique characteristics that have made them vulnerable," said US Treasury Secretary (and former Fed chief) Janet Yellen in
an interview with Bloomberg today, also warning Republican politicians that the "only good outcome" in their stand-off with Democrat President Joe Biden over the federal US borrowing limit would be to agree to raise it from the current $34 trillion so as to avoid the government of the world's largest economy defaulting on its debt.
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