Why have gold and silver prices soared?
Last night, the three major U.S. stock indices showed mixed performance, with the Dow Jones rising by 1.34%, hitting a record high. Some popular stocks performed poorly, with Oracle down 10.8%, Intel down 3%, and Nvidia down 1.5%. The Nasdaq Golden Dragon Index saw a slight decline.
Gold rose significantly, with New York futures gold re-establishing itself above $4,300 per ounce, closing at $4,309.3, an increase of over $80 in a single day. The domestic Shanghai gold main contract rose nearly 1%, closing at 968.16 yuan per gram.
Silver's gains were even more pronounced, with New York futures silver at one point rising by 6%. The domestic Shanghai silver main contract broke through 15,000 yuan, reaching a new high. Since the beginning of the year, the cumulative increase in spot silver has reached 120%, significantly surpassing gold.
On the news front, the latest actions by the Federal Reserve provided direct support to the precious metals market: it stated that it would purchase $8.2 billion in Treasury bonds on Friday under a new plan. Previously, the Fed announced a 25 basis point interest rate cut and also indicated it would purchase $40 billion in Treasury bonds over the next 30 days.
At the same time, the U.S. labor market data showed weakness, further raising market expectations for a Fed rate cut, which also supported gold and silver prices. Data from the U.S. Department of Labor on Thursday showed that for the week ending December 6, the number of initial unemployment claims increased by 44,000, marking the largest increase since March 2020.
In addition, tensions continue between the U.S. and Venezuela. On December 11, the U.S. Treasury announced new sanctions against Venezuela, targeting three nephews of President Maduro and six companies and related ships accused of transporting Venezuelan oil. Analysts believe this indicates that the Trump administration is further increasing pressure on Venezuela.
