Gold and silver prices retreated on Friday, but were positioned for weekly gains after silver’s surge to a more-than-decade-high and gold’s record-breaking rally on growing anticipation of further monetary policy easing by major central banks.
Spot silver fell 0.8% to $31.77 per ounce as of 0800 GMT, after hitting $32.71, its highest since December 2012, in the previous session.
Spot gold was down 0.2% to $2,665.01 per ounce, holding below its record of $2,685.42 in the previous session. U.S. gold futures fell 0.3% to $2,687.20.
Gold hit consecutive record highs and has gained about 1.6% this week in a rally that was sparked by the Federal Reserve’s outsized half-percentage-point rate cut last week and fuelled by China’s massive stimulus measures announced earlier this week.
Gold is facing pressure today as it has already reached high levels that have prompted profit-taking, said ANZ commodity strategist Soni Kumari.
The surge in silver prices is more a spillover impact from gold, Kumari said.
While some analysts warn silver’s rally may fade due to concerns over industrial demand, they are more bullish about gold.
“Gold price above $2,800 per ounce by the end of the year looks pretty reasonable if everything else remains equal,” said Kyle Rodda, financial market analyst at Capital.com.
One reason for the bullishness is further Fed rate cuts, which, along with geopolitical turmoil, makes the zero-yield bullion a preferred investment.
Currently, traders see a 53% chance of a 50-basis-point cut in November and a 47% chance of a 25-bp cut, per CME FedWatch Tool.
BMI said in a note it expects higher highs for gold in the coming months, noting the Fed rate cut odds come “against a myriad of geopolitical tensions, with conflict in the Middle East and the upcoming presidential elections in the U.S.”
The more immediate focus is on U.S. core personal consumption expenditures (PCE) data, the Fed’s preferred inflation gauge, and a speech by Fed Governor Michelle Bowman later in the day.
In other metals, platinum was down 0.5% to $1,002.65 and palladium shed 2.1% to $1,025.64.