Gold and silver prices are both reaching new heights, driven by ongoing economic instability, geopolitical tensions, and strong demand from central banks worldwide.
These factors have fueled a surge in the value of both precious metals, making them attractive investment options during uncertain times. As of Oct. 23, the spot price for gold closed at just over $3,785 per troy ounce (31 grams), the highest level on record, while silver prices in Canada have also soared, reaching a one-year high of $48.18 per troy ounce on the same day.
Gold’s value has surged nearly 30 per cent this year, outpacing the S&P 500’s gain of about 20 per cent since the beginning of 2024. Analysts attribute this rise to growing concerns around inflation, the strength of the U.S. dollar, and geopolitical instability, such as the ongoing conflicts in Gaza and Ukraine. Additionally, the recent unexpected interest rate cut by the U.S. Federal Reserve has heightened market uncertainty.
According to a report from The Associated Press, demand from central banks remains strong, surpassing the five-year average. Joe Cavatoni of the World Gold Council attributes this to rising concerns over inflation and economic stability. China’s recent stimulus efforts to boost consumer spending are also expected to increase retail investment in gold, further supporting its strong performance.
Over the last 12-months, the price of silver has soared about 47 per cent — a year ago silver was trading for around $34 an ounce. Silver’s upward momentum is driven by many of the same factors, including economic uncertainty and heightened demand for safe-haven assets. Additionally, silver’s role as an industrial metal, particularly in the renewable energy sector, has contributed to its rising prices. As the global shift towards green technologies continues, silver remains an essential component in solar panels and electric vehicles, further bolstering its market value.
Both gold and silver have become popular options for investors looking to hedge against inflation and market volatility. While gold’s record-breaking price often draws the most attention, silver’s dual role as both an industrial metal and a store of value has amplified its appeal during this period of uncertainty.
Analysts continue to monitor the market closely, noting that while demand remains strong for both metals, the unpredictability of global events could impact future prices. Nonetheless, the recent surge underscores the enduring value of gold and silver during times of economic turbulence.
Neils Christensen, a financial analyst with Kitco News, highlighted the recent rise in silver prices, emphasizing that silver’s breakout above $33 per ounce signals a significant shift in market dynamics. He attributes this increase to constrained supply, rising demand, and weaknesses in the U.S. dollar. Similarly, Jim Wyckoff, another analyst with Kitco, noted that both Europe and China are key drivers behind the recent gains in gold prices, with ongoing geopolitical tensions and economic instability contributing to the strong demand for precious metals. This demand, coupled with continued uncertainty in global markets, has helped push gold and silver prices to their highest levels this year.
The all-time high for silver was US$49.95 per ounce (approximately CAD$58.77 at the 1980 exchange rate), a level it reached on January 17, 1980, during a period of intense market volatility. According to online reports, including Wikipedia, this surge in silver prices was largely driven by the Hunt brothers, Nelson Bunker Hunt and William Herbert Hunt, who attempted to corner the silver market by purchasing massive amounts of the metal throughout the late 1970s. Their actions, combined with rising inflation, geopolitical tensions, and economic instability, caused a dramatic increase in demand for precious metals as a hedge against uncertainty.
The silver rally, however, came to an abrupt end in what is now known as “Silver Thursday.” On March 27, 1980, the silver market collapsed when regulators intervened to prevent further market manipulation, imposing new rules on buying silver using borrowed funds. This led to a massive sell-off, causing silver prices to plummet. The events surrounding this historic peak in 1980 serve as a reminder of the metal’s volatile nature and the market forces that can dramatically influence its value.