A recent report by BMO Capital Market analysts sheds light on the anticipated trajectory of silver and gold prices, attributing their upward momentum to the depreciation of the US dollar (USD) by major market players.
As the USD’s value fluctuates and reaches new lows, investors are increasingly turning to gold and silver as a hedge against inflation and economic uncertainties. The report highlights a surge in demand for these precious metals, with speculations suggesting a decline in the USD’s global prestige.
The report underscores the declining purchasing power of the USD over time, citing examples from different eras to illustrate the impact of inflation. Notably, the value of the USD has diminished significantly, compelling investors to seek appreciative assets.
With rising inflation and economic challenges, the USD has lost nearly half of its purchasing power. Consequently, investors are shifting their focus towards assets expected to appreciate, such as gold and silver, which are reaching record highs.
BMO Capital Markets predicts a bullish outlook for gold, with an average price of around $2,100 per ounce next year. Additionally, gold prices are forecasted to average approximately $2,250 per ounce in Q4, representing a 13% increase.
Similarly, silver is anticipated to experience significant price growth, with BMO analysts projecting an average price of $25.60 per ounce. This forecast suggests a 22% increase from December’s estimate, with silver prices expected to average around $25.30 per ounce next year, reflecting an 11% increase.
The report also suggests that the USD may struggle to compete with the rising prices of gold and silver, especially as global economies embark on a new era of heightened fiscal spending. This anticipated trend may further support the performance of precious metals as investors seek alternative stores of value amidst currency concerns.
