Gold and silver prices soar to new record highs
Gold and silver prices rose to new highs on Monday.
While gold was last seen at a record high of $4,445.8 per ounce, spot gold was last traded at $4,414.99. Prices have increased by almost 70 percent since the beginning of the year.
The metal has soared this year, breaking successive price records as risk assets tumbled in value. Gold is often seen as a safe haven asset in times of economic or geopolitical turbulence.
Silver generally follows gold and was last seen at a record high of $68.96 per ounce, while spot silver was last traded at $68.98. Prices have increased by 128 percent since the beginning of the year.
Shares of U.S.-listed gold miners and silver miners rose in premarket trading. iShares MSCI Global Gold Miners ETF It was last seen almost 2.7% higher.
As markets take in the much-anticipated Fed rate cut on December 10 and optimism returns in AI stocks in the previous trading session, economic speculation for next year will likely put global investors back on the defensive as they try to balance their portfolios.
According to Matthew McLennan, head of the global value team at First Eagle Investments, “gold’s monetary value has arguably re-emerged” due to massive fiscal deficits in the US, UK, Europe and, increasingly, Japan and China.
“The value of gold as a monetary potential hedge has reemerged,” McLennan told CNBC’s “The Exchange” on Dec. 17. “Gold has moved from bearish to more rationally valued relative to nominal assets that you would want to use as a potential hedge against it. And I think other precious metal complexes have followed it higher with some leverage.”
Investors will also be watching the race to nominate the next chairman of the Federal Reserve, where the central bank’s independence and credibility are in question after US President Trump’s sustained pressure on current chairman Jerome Powell.
“What we’re very focused on here is the long-term financial reliability of the United States, because I think that’s a condition of having an independent Fed and a rational chair,” McLennan added.
He also has his eye on wage inflation. “So what really matters going forward is a function of whether the business opportunities that have been on the rise recently are tracking corporate earnings,” he said.
