Record Increase in Gold and Silver Prices: Reasons and Effects

Gold Prices at Historic Peak

The strong expectations regarding future interest rate cuts by the Federal Reserve (Fed) and the resurgence of trade tensions between the U.S. and China have increased the demand for safe havens among investors. This situation has driven the demand for precious metals to a peak and has caused gold prices to exceed $4,100 in international markets for the first time.

Gold's Rise

As of 06:41 Turkish Time, spot gold increased by 1.3% to reach $4,162.31 per ounce, while December futures contracts for gold rose by 0.9% to $4,171. Gold, which has gained 58% in value since the beginning of the year, made a significant performance by surpassing the psychological threshold of $4,100 on Monday.

Sharp Rises in Silver

Alongside gold, silver prices also showed significant increases. Spot silver reached $53.13, marking a 1.1% rise due to increasing demand for safe havens and supply constraints in the physical market. The daily high of $53.45, reaching an all-time high, excited investors.

Goldman Sachs' Volatility Warning

Silver prices surpassed $52.50 per ounce, breaking the record set in 1980. However, this sudden surge in prices was supported by tightening liquidity, rising borrowing costs, and investors closing their short positions. Experts note that the rapid fluctuations in the precious metals market are shaped by investors seeking short-term profits under low liquidity conditions.

High Volatility and Risks

Goldman Sachs analysts reminded that the silver market is about one-ninth the size of the gold market, which contributes to the greater volatility of prices. Additionally, they warned that due to silver's different structure and lack of reserve support from central banks, serious price corrections could occur in situations of decreased investment demand.