Gold prices are currently higher but have pulled back from daily highs in midday U.S. trading on Thursday. The precious metal hit another record high of $2,708.70 per ounce for December Comex futures but is now trading at $2,688.90, reflecting a modest gain of $4.10. Silver prices have also risen, up $0.277 to $32.295, although they have retreated from a nearly four-month high earlier in the day.
The increase in gold and silver prices is being driven by a combination of economic stimulus from China and persistent safe-haven demand amid geopolitical tensions, particularly the escalating conflict between Israel and Hezbollah. China’s Politburo has pledged to stabilize the property sector and implement additional fiscal stimulus following the People’s Bank of China’s announcement of significant monetary easing, marking the largest stimulus since the pandemic. This move comes as concerns grow that China may miss its GDP growth target of 5% for the year.
However, a word of caution for investors: as highlighted in my previous commentary, a downturn in crude oil prices can significantly impact the precious metals market. Crude oil prices are beginning to show signs of weakness, which may indicate a potential top for gold and silver prices. A sustained drop in crude oil could diminish the bullish momentum in precious metals.
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