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In a remarkable turn of events, gold futures and spot prices have surged past the significant $2,000/oz mark on Monday, November 27.
This remarkable uptick can be attributed to a surge in safe-haven demand, fueled by anticipation surrounding key economic data set for release this week.
Moreover, the recent expectations of a Federal Reserve pause in interest rate hikes have exerted downward pressure on the U.S. dollar, providing substantial tailwinds for gold.
The $2,000 level serves as a crucial support for gold prices in the near term. Closing above this benchmark could open the door for additional gains.
However, it’s essential to note that further upside driven solely by haven-seeking flows may face limitations without corroborating cues from upcoming figures on gross domestic product (GDP) and inflation.
All eyes are on Thursday, November 30, when the Fed’s preferred core personal consumption expenditures (PCE) price index and a revised print on third-quarter GDP growth are due.
These pivotal numbers are expected to influence gold’s trajectory as investors seek refuge from market uncertainties.
(Gold Price One-year Chart)
In tandem with gold’s surge, silver has also experienced a notable uptrend, surpassing $24.6/oz and securing an impressive 10% gain in November.
The rally in silver prices can be attributed to concerns about the availability of industrial silver, coupled with robust demand. The Silver Institute projects a 2% decrease in global mined silver production in 2023, mainly due to reduced output from major producers like Mexico and Peru.
Simultaneously, the increasing investments in solar panels, power grids, and 5G networks have fueled expectations of an 8%-10% surge in silver demand.
The surge in silver prices is substantiated by the one-year chart, illustrating a significant upward trajectory. Market participants are closely monitoring these developments, as silver continues to play a crucial role in various industries.
(Silver Price One-year Chart)
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