Gold, Silver Prices Pull Back After Another Record Performance

 

Precious Metal Prices Pull Back After Another Record Performance

(Bullion News Network) – Precious metal prices pulled back today, erasing most of Tuesday’s gains. Gold dropped over $30 on the day, although the precious metal remains elevated above $2,720 per troy ounce. Earlier this week, a perfect storm of geopolitical and economic stressors pushed gold to a fresh all-time high beyond the $2,750/oz level. Sell-offs and moderate profit taking are likely behind the price correction, which pulled gold back from an exceptionally bullish beginning to the week. 

Silver took heftier percentage losses, dropping over 3% today after ending Tuesday within $.20 of $35/oz. Like gold, profit taking may be playing a significant role in the market retraction for silver prices. Despite today’s correction, silver remains up by over 41% on the year and sits well above a ten-year high. Adding to silver’s momentum heading into late-October is the precious metal’s solid supply-demand fundamentals. The silver supply deficit remained extremely high in 2024, and safe haven buying helped turn the metal’s supply chain concerns into genuine scarcity in the second half of the year. 

The community is bullish on silver!

The spot price of silver pulled back this morning after soaring past a 12-year high, losing a dollar since market open.

This price action brought the gold-silver ratio back up above 80:1.

Is it time to buy the momentary dip? https://t.co/vQAlHqLG6D

— Hero Bullion (@HeroBullion) October 23, 2024

The domestic political and economic stressors that drove metal prices up are largely unchanged. The U.S. presidential election is just two weeks away, and the two candidates remain virtually tied, according to leading pollsters. Markets still anticipate a 25 basis-point rate cut when the Fed meets on November 7th, just two days after Election Day. Both bullishness on the prospects of another interest rate cut from Fed Chair Powell’s FOMC and market uncertainty surrounding a pivotal presidential election continue to add bullish pressure to gold and silver markets. 

Internationally, geopolitical conflict continues to provide tailwinds to precious metals. Gold and silver prices trended up in August and September as Iran-Israeli tensions grew. A series of bombings between the two countries threatened geopolitical stability in the larger region, and Israel’s ongoing offensive against Lebanon-based Hezbollah injected even more uncertainty into the Middle East. These rising tensions helped gold claim multiple new all-time highs in September, and more escalation at the beginning of October added even more fuel to the precious metal’s historic bull run. 

This week, U.S. leaders confirmed that North Korean soldiers are being sent to aid Russia in its prolonged war in Ukraine. This new development adds another layer of uncertainty to the Russia-Ukraine war, which rocketed gold to fresh heights when it began in 2022. In response, South Korea warned that it will send arms to Ukraine if North Korea indeed intervenes on Russia’s behalf. U.S. officials are unaware of the actual intention of North Korean assets in the conflict, but military leaders remained concerned that intervention by major world powers could turn the Russia-Ukrainian conflict into a much more disastrous proxy war. 

Paired with ongoing regional conflicts in the Middle East, this latest development in the Russia-Ukraine war could have serious implications for fear-motivated demand for safe haven assets. The U.S. presidential election and another meeting of the Federal Reserve are two additional events that could have a significant impact on the value of safe haven precious metals heading into November and December 2024.