Gold has recorded its largest weekly gain in five years, driven by growing economic uncertainty and escalating trade tensions. The precious metal reached $US4380 per ounce on Friday, bolstered by emerging vulnerabilities within credit markets. Analysts attribute this surge to a confluence of factors, including concerns about central bank independence, political instability, tariffs, and ongoing geopolitical tensions, all of which are reinforcing gold’s appeal as a safe haven investment.
Daniel Hynes, a senior commodities analyst at ANZ, noted the strong strategic investment interest in gold amid current global conditions. Investors are increasingly seeking the stability offered by precious metals as a hedge against broader market volatility and economic headwinds. The rising price reflects a widespread shift towards safer assets as the global economic outlook becomes more clouded.
Silver has also experienced a significant rally, surpassing highs set in 1980 and recording gains of over 85 per cent year-to-date. This surge in silver prices is partly attributed to tightness in the London market, which has triggered a global search for the metal. The one-month annualised borrowing cost for silver is currently around 20 per cent, highlighting the intense demand and constrained supply.
These movements in precious metals underscore the current risk-averse sentiment prevailing in financial markets, as investors seek refuge from potential economic downturns and geopolitical risks.
