Gold, silver and copper rally has just taken a breather — new highs are not that far off, experts say

Gold, silver, and copper prices have recently achieved multi-year highs, with gold reaching a new peak of $2,449.89 per ounce. Despite a slight retreat, experts anticipate further increases driven by strong demand, particularly from China, and weakening U.S. economic indicators. Silver, benefiting from its correlation with gold and robust industrial demand, also hit a decade high of over $31 per ounce. Meanwhile, copper reached an all-time high of $10,857 per ton, supported by supply constraints, with forecasts suggesting potential future gains.

Geopolitical Risks and Gold Prices
Geopolitical risks have been a significant driver in the surge of gold prices. The uncertainty created by these risks tends to increase demand for gold as a safe-haven asset. This is evident from the recent record highs in gold prices, where geopolitical tensions have bolstered investor demand for more secure investments. Additionally, an increase in gold demand from China, which has become the world's largest consumer of bullion, has further fueled the price rally.

U.S. Economic Indicators and Metal Prices
U.S. economic indicators, particularly weak economic data and the resulting expectations for U.S. Federal Reserve rate cuts, have also played a crucial role in the pricing of gold. Lower interest rates make gold more attractive compared to yield-bearing assets like U.S. Treasuries. This scenario is reflected in the raised forecasts for gold prices by financial analysts, predicting further increases by the end of the year.

Silver and Copper Dynamics
Similar to gold, silver prices have also been influenced by a mix of investor interest and supply challenges, with prices reaching over a decade high. Silver benefits from its dual role as both a precious and an industrial metal, which positions it well during periods of both economic uncertainty and recovery6. Copper prices have been supported by supply tightness and disruptions, such as production halts at major mines, which have led to bullish sentiments and predictions of significant price increases in the near future15.

Overall, the combined effects of geopolitical tensions and U.S. economic policies are creating a favorable environment for the continued price strength of both precious and industrial metals6.