Fuse is lit as gold and silver rocket!
20 September 2024
In this week's market update:
Gold prices surged again this week, with the precious metal rallying by 2% to USD $2,585 per troy ounce (oz).
Silver also powered higher, with a +7% move to USD $30.80oz, with the gold to silver ratio falling to 84.
The catalyst for the move was the 0.50% reduction in interest rates announced by the US Federal Reserve (the Fed) this week.
The move by the Fed is likely the first of many, with markets currently expecting a further 1.90% reduction in interest rates between now and the end of 2025.
The rally in gold and silver was matched across a range of risk assets, with equities, commodities and cryptocurrencies also moving higher in the aftermath of the cut.
While nearly all markets enjoyed a short-term sugar hit as a result of the rate cut by the Fed, history suggests rate cutting cycles can see the stock market suffer major pullbacks, especially if recessionary conditions in the economy continue to surface.
These factors reinforce the case for holding both gold and silver in a portfolio, especially in an environment where core inflation remains well above target levels.
Silver is expected to outperform given a combination of industrial demand drivers, supply side constraints, its historical outperformance in high inflation environments, and the fact it remains cheap relative to gold.
September Silver Special
ABC Bullion are offering reduced premiums on select products in our silver range, including the 5-kilo ABC Bullion cast bar. This product, the largest bar in our range, provides exceptional value, and is available from as little as $200 above spot.
To access the 5-kilo ABC Bullion cast bar, as well as other products, simply login to your account at abcbullion.com, with our website offering 24/7 access to the precious metal market.
Alternatively, please feel free to call the ABC Bullion sales and client services team on 1300 361 261 Monday - Friday 8:30am - 6:00pm (AEST) or Saturday 10:00am – 3:00pm (AEST).
Jordan Eliseo
General Manager
ABC Bullion Australia
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