Gold price soars to record high, silver squeezed to near record peak
NEW YORK (October 13) Gold and silver prices are sharply higher in early U.S. trading Monday, with gold hitting another record high and silver very near its record high set in 1980. Safe-haven demand as the U.S. government remains shut down and a short squeeze in silver are keeping bulls confident and bears unwilling to step in front of a steaming locomotive. The recent bigger daily price moves in gold and silver markets suggest volatility will remain high in the near term. December gold was last up $95.20 at $4,095.80. December silver prices were up $2.398 at $49.63.
Spot silver prices overnight hit the highest level in decades as a historic short squeeze in London intensified, “with a fresh surge in prices adding urgency to a worldwide hunt for bullion that could alleviate the mismatch between demand and supply,” reported Bloomberg. Spot silver climbed as much as 3.1% to near $52.00 an ounce, exceeding last week’s peak, while spot gold surpassed $4,070.00 an ounce to a record high. Platinum and palladium also surged, amid signs that market stresses caused by surging investor demand are starting to spread to other precious metals. Concerns about a lack of liquidity in London are prompting the squeeze. Benchmark prices in London have soared to near-unprecedented levels over New York prices, prompting some traders to book cargo slots on transatlantic flights for silver bars — an expensive mode of transport typically reserved for gold — to profit off the massive premiums in London.
President Trump’s order of permanent layoffs has hardened Democrats’ distrust of Republicans and may prolong the government shutdown, according to a report from Bloomberg. Democrats see the funding fight as their first real moment of leverage and are focusing on health care costs, which they believe will resonate with voters ahead of next year’s midterm elections. Senate Democrats say they won’t drop their filibuster blocking a reopening of the government without upfront negotiations on their demands, including an extension of Affordable Care Act premium subsidies. Republicans have dismissed Democrats’ efforts as nothing more than political opportunism, arguing their real concern is satisfying a liberal base eager to take on Trump.
In other overnight news, President Trump’s administration on Sunday signaled openness to a deal with China to quell fresh trade tensions while warning that recent export controls announced by Beijing last week are a major barrier to talks. That came after China late last week added new port fees on U.S. ships, started an antitrust investigation into Qualcomm Inc., and unveiled sweeping new curbs on its exports of rare earths and other critical materials.
Nymex WTI crude oil futures dropped by over $3.00 a barrel Friday and to a 4.5-month low near $58.00 a barrel as renewed US-China trade tensions rattled markets. Crude oil prices did rebound overnight, gaining around $1.00. A hot U.S.-China trade war could slow global economic growth and curb oil demand. The decline was compounded by ongoing bearish sentiment from rising global supply, including higher output from OPEC-plus and non-OPEC oil producers. Easing tensions in the Middle East, including progress toward a Gaza ceasefire, also removed a key risk premium from oil prices. Risk-averse investors pulled back from equities on Friday, amplifying downward pressure on oil.
The key outside markets today see the U.S. dollar index firmer. Crude oil prices are up and trading around $59.75 a barrel. The yield on the benchmark 10-year U.S. Treasury note is presently 4.04%.
KitcoNews
