According to precious metals analysts at Heraeus, gold prices are on the cusp of a correction due to a lack of strong demand outside of China. Despite this, silver prices are expected to be supported by a rebound in Indian fabrication restocking.
In their latest report, Heraeus analysts highlighted that gold prices hit a joint record weekly close of $2,395/oz, as geopolitical tensions and inflation concerns drove investors towards the safe-haven asset. With the Federal Reserve indicating it will keep interest rates low to combat inflation, gold buyers are seemingly unfazed by rising Treasury yields and a stronger US dollar.
On the other hand, silver prices are benefiting from increased fabrication demand in India. After a 25% decline in silverware and jewelry production in India last year, recent trade data suggests a restocking trend is underway. This uptick in demand is bullish for silver prices in the short term.
However, both gold and silver prices took a hit on Monday, with spot gold down 2.20% and spot silver down 3.93% at the time of writing. Despite this, Heraeus remains optimistic about silver’s potential, pointing to India’s strong economic growth and growing middle class as positive drivers for silver prices in 2024.
Overall, while gold prices may face headwinds in the near term, silver prices could benefit from improving demand dynamics, especially in key markets like India. Investors will be closely watching how these factors play out in the coming months to see how they impact the precious metals market.
