Gold is attracting renewed interest from investors in the U.S. and UK, according to precious metals analysts at Heraeus, while silver prices may face downward pressure due to advances in less metal-intensive solar technologies.
In their latest report, Heraeus highlighted gold’s significant rise following June’s Consumer Price Index (CPI) data, which revealed a year-over-year inflation rate of 3.0%, the lowest since June 2023. This development has bolstered expectations of an impending rate cut by the Federal Reserve. “The gold price surged by over $30 per ounce after the news, aided by a weakening dollar, suggesting that potential rate cuts could significantly impact the dollar and elevate gold prices beyond $2,400 per ounce,” the analysts noted.
They also observed substantial ETF inflows, totaling around 1.1 million ounces in the past two weeks, primarily driven by investments from the UK and U.S. “Despite a 9% reduction in managed money long futures positions since late May, ETF investments are picking up, helping stabilize gold prices,” they explained. Currently, spot gold is trading at $2,434.82, reflecting a 1% increase on the day.
In contrast, silver faces potential challenges due to innovations in the solar sector that could reduce the metal’s use. The China PV Industry Association (CPIA) reported that the solar photovoltaic (PV) sector consumed 220 million ounces of silver in 2023, accounting for 18% of global demand. However, new technologies like Zero Busbar and LECO may lower silver usage in solar cells. The CPIA estimates that these advancements could reduce silver consumption in TOPCon cells from 109 mg to 80 mg per cell, and in HJT cells from over 200 mg to 70 mg by 2030.
While silver prices are trending upward, they have not matched gold’s gains, with spot silver last trading at $30.952, up 0.54%. Heraeus cautions that silver may encounter resistance around the $32.01 mark if tested again.
