Gold futures reached a new all-time high at the closing bell on Friday, cementing a remarkable rally. Concurrently, silver concluded a four-day surge, marking its best settlement since early 2013.
The bull run in precious metals this year has been credited to impending interest rate cuts by the Federal Reserve. This has spurred positive momentum in gold and silver prices as they are non-interest-bearing assets.
“Precious metals are non-interest-bearing assets so expectations of lower interest rates lend support to both gold and silver prices,” noted Chris Gaffney, president of World Markets at EverBank, in an interview with Marketwatch.
Gaffney highlighted that silver, being an “industrial precious metal,” tends to outperform gold during periods of robust global economic activity.
If the Fed opts for minimal or no rate cuts, Gaffney foresees limited upside for gold and silver. However, in case of geopolitical tensions escalating or a significant global economic slowdown, gold could surpass silver in performance.
In the commodities market, front-month Comex gold for May delivery closed the week with a 1.9% increase, reaching $2,412.20 per ounce. Meanwhile, Comex silver for May delivery settled with a solid 9.8% gain, further boosted by a 4.6% surge on Friday.
Notably, Comex copper futures also hit an all-time high settlement, closing the week with a 7.7% increase, reaching a historic level of $5.05 per pound.
Among the top performers in the stock market this week were precious metals mining companies, with significant gains recorded by Platinum Group Metals (+36.2%), Novagold (+22.9%), Endeavour Silver (+16.5%), and several others.
As mining stocks nearly caught up with the impressive gains in gold futures this year, Chris Mancini, portfolio manager at Gabelli Gold Fund, anticipates that mining companies will generate substantial free cash flow if gold prices remain stable or continue to rise.