(Kitco News) – The precious metals rally continues unabated as gold, silver, and platinum prices set multi-year and all-time highs, with even significant profit-taking unable to tamp down momentum, according to precious metals analysts at Heraeus.
In their latest precious metals update, the analysts wrote that FOMO is stronger than profit-taking in the gold market right now.
“Spot gold surged to $3,897/oz and remains very overbought but clearly overbought does not mean over, and there is still sufficient buying to push up the price,” they said. “How long that will last before a correction sets in remains to be seen. Gold ETF positioning strengthened in September, with holdings up 3.6 moz and now 17% higher year-to-date at 97.2 moz– the highest level since September 2022. Inflows continued last week with a further 603 koz added, extending the streak to six consecutive days, though momentum moderated into the close of the week.”
The analysts noted that while the U.S. government shutdown has been getting all the attention, the level of government deficit spending is actually more significant.
“Disagreement in Congress over funding is nothing new,” they said. “The US government has been shut down 21 times in the last 50 years, although it has become a less frequent occurrence in the last 20 years, and typically lasts for a few days to a few weeks. More government spending appears to be a certainty sooner or later and, while a worst-case scenario may be a long way off, gold offers some insurance against policies that weaken the dollar.”
And in an area that is more directly relevant to gold investors, “Federal Reserve members have been showing some uncertainty over the future path of interest rates, with public statements giving different weight to how important inflation is compared to the labour market,” they wrote. “However, the futures market shows a high expectation of a further two 25 bp rate cuts at the final two Fed meetings of the year, which could be considered supportive of gold.”
Gold prices are setting new all-time highs once again on Monday morning as they climb closer to the $4,000 per ounce level.
Spot gold last traded at $3,949.18 per ounce for a gain of 1.61% on the session.
Turning to silver, Heraeus said the gray metal is extending its rally in tandem with gold, with spot prices reaching fresh 14-year highs above $48 per ounce.
“The drivers of gold and silver remain closely aligned, with both metals benefitting from the same macroeconomic tailwinds,” the analysts noted. “Silver, however, continues to benefit from an additional structural support layer: rising industrial demand. As a result, silver is up 64% year-to-date, outperforming gold, and edging closer to the all-time high of $50/oz.”
“ETF inflows continue to drive momentum, even at elevated prices, with net holdings increasing by another 10 moz last week and climbing 16% year-to-date to 828 moz,” they noted. “That said, aggregate holdings are still below their 2021 peak of over 1,021 moz, suggesting some headroom remains for further accumulation. However, sizeable outflows could trigger a price correction, particularly as technical indicators suggest an overbought market.”
U.S. physical bullion demand, on the other hand, is showing signs of softening. “US Mint data reported that silver coin sales have contracted sharply, down over 50% year-on-year, with 8.8 moz sold year-to-date (until August) versus 17.7 moz over the same period in 2024.”
Silver prices are continuing their approach toward all-time highs as they close in on $49 per ounce in Monday trading.
Spot silver last traded at $48.669 per ounce for a gain of 1.41% on the daily chart.
And the platinum market continues to rocket higher as well, breaking above $1,600 per ounce last week to reach a 12-year high.
“Notably, platinum also hit a record high in yen terms last week, exceeding its 2008 peak after reaching ¥7,631/g, although it did then pull back as the yen strengthened,” Heraeus wrote. “In contrast, euro-denominated prices, while approaching €45/g, remain below the 2008 peak of €49/g. For Japan, the weaker yen has pushed platinum to historically expensive levels, raising the risk of demand suppression in key segments such as jewellery and investment.”
“The South African 4E rand basket price has now risen well above ZAR30,000/4E oz (despite a strengthening rand), boosted by higher platinum and palladium prices along with strong revenue from co- and byproducts,” the analysts added. “Consequently, it is estimated that most producers are currently achieving a healthy margin on an all-in sustaining cost (AISC) basis.”
Spot platinum prices are also pushing higher on Monday morning, last trading at $1,639.00 per ounce for a gain of 2.71% on the session.
