Gold will benefit from renewed dollar depreciation, silver producers reap rewards from strong prices
NEW YORK (November 17) Gold and silver prices came roaring back last week, and the reopening of the U.S. government and likely rate cuts could push gold higher, while solar demand continues to support silver over the long term, according to precious metals analysts at Heraeus.
“With the government open, spending has resumed and deficits continue, which leaves the broader concern of how this plays out and the implications for the US dollar,” they noted in their latest update. “Jay Powell commented after the last Federal Reserve meeting that another rate cut in December is not certain. However, Fed governor Miran, who dissented in favour of a 50 bp rate cut at the last two Fed meetings, is still pushing for a 50 bp cut owing to better-than-expected inflation data and a weak jobs market.”
“The CPI for September came in at 3.0%, above the Fed’s 2% target, but clearly below the current Fed funds range of 3.75% to 4.0%,” the analysts wrote. “The US government shutdown prevented government data from being published and if the data was not collected, then some October statistics, such as the jobs report, may never be available. However, the ADP jobs figures have been weak, which suggests that the Fed will cut rates in December.”
“With relatively loose fiscal and monetary policy, concerns over dollar depreciation may keep gold on investors’ buy list,” they said.
Gold prices are slightly lower on Monday morning following last week’s rally to $4,200, but the spot price is holding comfortably above $4,000 after hitting a session low near $4,050 per ounce just after midnight EST.
Spot gold last traded at $4,067.23 per ounce for a loss of 0.45% on the session.
Turning to silver, Heraeus analysts noted that the gray metal also staged a strong comeback last week, with spot prices rising to their highest level in nearly a month. “The metal outperformed gold, rising by 6% over the week and narrowing the gold-to-silver ratio to 79:1,” they said.
And primary producers have been the biggest beneficiaries of the higher silver prices. “First Majestic Silver Corp. reported record quarterly silver production of 3.9 moz in Q3’25, up 96% year-on-year, marking its strongest quarter on record,” the analysts wrote. “The company also posted record quarterly revenue of $285.1 million, with silver sales accounting for 56% of the total. Similarly, Canada-based Aya Gold & Silver delivered record silver output of 1.35 moz in the third quarter, a 278% increase from the previous year, owing to the operation of a new processing plant in Morocco. The company also achieved record revenue of $54.3 million, driven by both higher volumes and a stronger realised silver price.”
Strong structural demand for silver from photovoltaics is also set to continue, albeit not at the record rate of last year. “The International Energy Agency (IEA) stated that global solar capacity additions could plateau at around 540 GW per year through to 2035,” they said. “Despite this slowdown, renewables, led by solar, are still projected to expand their share of electricity generation from about one-third in 2024 to just under half by 2035, according to the IEA’s Current Policies Scenario.”
Silver prices are also marginally down on Monday morning and are trading near the lower end of their $1 daily range.
Spot silver last trading at $50.522 per ounce for a gain of 0.13% on the daily chart.
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