Silver Prices Increased by 10% in Only 3 Days

Gold and silver gained value in yesterday’s trading session, in line with a strong global rally in precious metals. October gold futures on MCX increased by 0.35%. September silver futures gained 1%. In the previous session, silver surged 3.2%, extending Tuesday’s gain.

In global markets, precious metals’ prices have been supported by a weaker US dollar and expectations of more fiscal measures by central banks. 

Spot silver prices dropped by 0.4% to $26.91 per ounce.

The US dollar faces large amounts of pressure with the greenback index declined by 0.2% to a nearly two-year low against its opponents. A devaluation of the US dollar makes gold cheaper for holders of other currencies. 

Analysts have Turned Cautious on Gold?

As a response to the coronavirus pandemic, governments and central banks around the world implemented unprecedented stimulus measures. Those actions have helped the economy during this extraordinary time, however, it accelerated inflation. Investor expectations for annual inflation over the next decade have moved higher for the past four months. 

Now that global economic recovery remains uncertain, demand for safe-haven assets such as gold and silver is increasing. Kotak Securities stated that the yellow metal has moved upwards over the last few days. Gold felt support from the weakness of the US dollar and strong investor interest. On the other hand, coronavirus infections are rising globally and tensions between the world’s largest economies, the US and China, are increasing.

Edward Moya, a senior market analyst at Oanda Corp., affirmed that the main driver behind gold’s rally has been real rates that keep on plummeting and don’t show signs of easing anytime soon. 

US bond markets have been a contributing factor for the gold rush. 

According to Mark Mobius, the co-founder at Mobius Capital Partners stated that the yellow metal’s interest rate close proximity to zero makes it attractive. You don’t have to stress about not getting any interest in your gold. 

Analysts have been predicting incredible upside for the precious metal for several months. In April, the Bank of America increased its forecast for gold to $3.000 an ounce. 

However, some experts have become cautious about gold after the sharp rally of the precious metal. For the last few days, gold prices rose. While there are positive factors, Kotak Securities announced that it is largely momentum buying at current elevated levels.