That roaring sound you may be hearing today is the sound of silver soaring to new highs.
The white metal smashed through $90 per troy ounce for the first time and peaked at $92.15 per troy ounce in morning trading in New York. It settled at a record $90.869, up 5.8%.
Gold was rising to new highs, topping out at $4,650.10 per ounce before settling at $4263.30 an ounce, up 0.8%. There’s talk prices could move higher, but my experience suggests the markets are becoming increasingly vulnerable to price blow-offs.
The rallies in both metals are partly due to global uncertainty, with the turmoil in Iran and its potential for a sudden regime change playing a major role.
President Donald Trump is trying to capitalize on the Iranian situation as well, telling Iranian protestors on Monday that “Help is on its way!” and actively encouraging protests against the Islamic regime that’s been in power since 1978.
That’s a big shot of caffeine to the market.
“Gold is the ultimate reserve currency of the world and in a world of uncertainty where Trump wakes up in a morning and says he’s going to invade Greenland, you should be buying gold,” Veritas Investment Research analyst Martin Pradier told Bloomberg News.
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Two additional factors are contributing to the silver-and-gold runups:
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The continuing battle between the Trump Administration and Federal Reserve Chairman Jerome Powell, with the Administration engaged in a criminal investigation of the chairman. The probe has generated tremendous pushback from bankers globally and members of Congress.
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The aftermath of the American seizure of the now-deposed Venezuelan President Nicolas Maduro. Maduro was detained on Jan. 3 and moved to New York to face drug trafficking charges.
Today’s trading appears to be too bullish to me. Silver has jumped more than 26% just since Dec. 31, and is up 212% in the last 52 weeks, The Wall Street Journal said. Gold is closing in on a 7% gain for the year and has risen 71% in the last 52 weeks.
The relative strength index for silver was at 72 on Wednesday, a sign the metal is at least mildly overbought. If the RSI, a key momentum indicator, hits 80, that’s a clear overbought signal.
That said, there are big bulls on silver. Hao Hong, chief investment officer at Lotus Asset Management Ltd., told Bloomberg silver could hit $150.
Who is buying silver and gold has changed a bit in the last few months, Max Layton, Citi Global Head of Commodities Research, told CNBC on Wednesday.
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