(Kitco News) - December Comex silver this week notched a 14-year high of $42.29 an ounce. Safe-haven demand amid a nervous general marketplace is driving the precious metal higher. Gold prices today hit more record highs, which argues silver, also affectionately called “poor man’s gold,” is on track to do the same. The all-time record high in nearby Comex silver futures is $50.36, scored in January of 1980. Silver prices have more than doubled in price over the past three years, boosted by mounting geopolitical risks, including global trade disruptions caused by U.S. tariffs.
The specific main bullish elements for silver are the rising prospects for lower U.S. interest rates yet this year, starting at the mid-September meeting of the Federal Open Market Committee (FOMC). A quarter-point rate cut in the Fed funds rate is widely expected by the marketplace. After today’s downbeat U.S. jobs report, a total of three 0.25% rate cuts from the Fed are now expected yet this year.
Another bullish fundamental for silver is a jittery global bond market at present. Global bonds yields are on the rise (lower prices) mostly due to worries about inflation, government debt sales and fiscal discipline. Uncertainty surrounding the Federal Reserve’s independence are adding to the bond market pressures and general trader and investor anxiety.
Veteran market watchers know that history shows the months of September and October can be rough for the stock, financial and currency sectors. The U.S. stock market’s worst performing month is September. That’s creating a sqeamish equities environment at present and that’s a positive for the safe-haven metal, from a competing asset class perspective.
Importantly, there are no early, strong technical warning signals that would suggest a market top is close at hand for silver. That means the path of least resistance for prices will remain sideways to higher until some solid chart clues suggest a market top is in place. By the way, you’ll get those early chart clues on potential price trend changes in gold and silver by continusing to read my Kitco reports.
