Crazy! Just now, gold and silver hit new all-time highs again

Gold and silver prices hit new highs again!

As of the time of writing on January 14th, international gold prices surged again, with spot gold prices rising to $4,639.4 per ounce, and London spot silver prices climbing to $91.53 per ounce.

Recently, the Trump administration has been acting unilaterally, and its investigation into Powell has once again raised market concerns about the independence of the Federal Reserve. Metals have generally risen, with gold and silver prices climbing steadily. Wall Street firms have stated that any development that raises doubts about the Fed’s independence will increase uncertainty in U.S. monetary policy, which could strengthen the existing trend of dollar reduction within the industry and boost interest in traditional safe-haven assets like gold.

In addition, large-scale gold purchases by central banks around the world and the persistent U.S. fiscal deficit have become supporting factors for the rise in gold prices.

Notably, geopolitical conflict risks have risen sharply, with Trump being briefed on military strike options against Iran, and the Middle East powder keg is on the verge of exploding. Meanwhile, the U.S.'s unprecedentedly severe economic blockade of Iran has further reinforced the underlying logic behind the strength of precious metals.

This astonishing surge may not be over yet. In their latest report, Citigroup analysts raised their three-month target price for gold to $5,000 per ounce and increased their target price for silver to $100 per ounce. However, after reaching these highs, gold and silver are likely to experience a pullback.

HSBC also predicted that rising geopolitical risks could push gold prices above $5,000 per ounce in the first half of this year, but gold prices might see a significant correction in the second half.

Consultancy Metals Focus stated that silver prices are likely to hit triple-digit peaks this year because of the smaller market size of silver. When benefiting from many macroeconomic factors driving gold investment, its price volatility tends to be magnified.

However, amid the current unstoppable momentum, some institutions remain cautious, leading to notable divergence in the market.

Goldman Sachs poured cold water on the market, warning that investors flocking to gold as a safe haven may be making a major mistake. Historically, gold has experienced deep and prolonged drawdowns, with maximum declines reaching 70%.

Additionally, the Shanghai Gold Exchange issued a notice stating that recent price fluctuations in precious metals have significantly intensified, with uncertainties continuing to rise. The institution advised investors to reasonably manage their positions and invest rationally. To prevent excessive inflows at high levels, gold ETFs have started imposing limits. On January 12, the E Fund Gold ETF announced it would suspend subscriptions starting January 16 and resume them on January 19.

Conclusion —

The consecutive new highs in gold and silver clearly reflect the market's strong risk aversion and doubts about the traditional monetary system amid the current high levels of global political and economic uncertainty. Although the upward trend remains robust, supported by multiple favorable factors, prices are already at absolute historical highs, which will inevitably increase volatility.

Author: Flying Fish

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