Gold and silver prices are soaring, fueled by a combination of factors including U.S.-China trade tensions, rising Indian seasonal demand, and the subcontinent’s solar buildout, according to precious metals analysts at Heraeus.
The recent rally in gold prices has been attributed to a weaker U.S. dollar and a pullback in yields following an improved U.S. inflation outlook. Heraeus analysts point to the decline in Treasury yields and a weaker dollar as factors contributing to gold’s appeal to international investors.
In addition, the ongoing trade tariff threats against China and robust Indian gold purchases around the May Akshaya Tritiya festival have further boosted gold prices. Spot gold reached a record-high close of $2,408 per ounce last week and continued to climb, reaching just below $2,450 per ounce over the weekend.
On the silver front, Heraeus noted that India imported more silver in Q1 2024 than in all of 2023, with imports reaching approximately 3,730 tonnes. Indian demand for silver is expected to remain strong, driven by efforts to localize solar supply chains and the growth of the cell manufacturing sector.
Spot silver also experienced a strong rally, with Friday’s closing price of $30.63 per ounce the highest in over 11 years. Silver is finally catching up to gold, outperforming the yellow metal year-to-date. The gold:silver ratio has significantly decreased as a result.
As of the time of writing, spot silver was trading at $32.035 per ounce, up 0.72% on the session. Both gold and silver prices are expected to remain strong in the coming months, supported by multiple factors including geopolitical tensions and growing demand from India’s solar industry.
