Gold has climbed to its highest price ever, surpassing the peak reached in summer 2011. Precious metals have started the new week with even more strength than the previous one, which was already starkly positive. Bullion climbed by 1.5% on the weakening Dollar and on growing tensions between the US and China, which could slow down the recovery in the US. In this uncertain scenario, investors are filling their portfolio with gold to be protected not only from a stock correction, but also from the risk of further greenback declines. In other words, gold in this phase is seen as insurance from turbulence on currencies markets. While currencies can all be printed, the finite nature of gold and silver makes them better stores of value at these times of uncertainty.
This week has also started with a strong rally for silver, which skyrocketed to $24, confirming investors’ huge appetite. This is in part coming from growing use of silver from the so-called green sector but is also related to the strong recovery of gold and the whole precious metal sector, which is seen as insurance in case of a new storm or high volatility in stocks and currencies markets. Despite all this, we should remember how quick this rally was for both gold and silver. This could mean that, once a correction arrives, it could be significant. But for now at least, there are no signals of inversions.
