Gold rallies as post-Brexit jitters lift precious metals. Silver is on a tear.
by Myra P. Saefong and Rachel Koning Beals, Market Wacth:
Silver futures logged their largest weekly climb since 2013 Friday, hitting a nearly 22-month high as the U.S. dollar softened and investors continued to search for safety.
Precious metals have benefited from worries sparked by the U.K.’s decision to exit the European Union, dubbed Brexit. But precious metals have also seen somewhat of a pull back as appetite for risk lured buyers back into stocks over the past few sessions.
September silver SIU6, +6.62% jumped 96.5 cents, or 5.2%, to settle at $19.588 an ounce. Prices haven’t settled at a level this high since mid-August 2014. Futures prices saw a 10.1% weekly gain—the largest since August 2013, according to FactSet.
Meanwhile, August gold GCQ6, +1.84% gained $18.40, or 1.4%, to settle at $1,339 an ounce, with futures marking the highest close since July 10, 2014. Trading was choppy this week, but prices saw a 1.3% weekly gain, according to FactSet data, after posting a nearly 7% climb for the second quarter.
Precious metals gains have held up relatively well as concerns about anemic global growth persist.
“We have got the Brexit result, but that is a result without a resolution,” said George Milling-Stanley, head of gold investment strategy at State Street Global Advisors. Many uncertainties remain and “these will likely continue to roil financial markets, which should benefit gold.”
He expects to see a brief “pause for breath” in gold as the market digests the Brexit news, then a steady move higher in the second half of the year that may take gold to $1,350 and possibly higher. “It is not difficult to see $1,400 or even $1,450 by year-end,” said Milling-Stanley.
Silver outperforms gold
Fawad Razaqzada, market analyst at Forex.com and City Index, pointed out that silver has significantly outperformed gold’s Brexit-related gains. Silver, unlike gold “has also many industrial uses and so when base metals like copper rally, silver benefits from this source, too,” he said.
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