July 24, 2024

Silver Price Above $40 and Gold Hits New All Time High in Overseas Trading

Gold soared to new all time highs in Asian markets and silver pierced the $40 per ounce level as new demand continues to drive precious metal prices higher.

The world spot price of gold hit an all time high of $1,470.80 up $12.40 and silver pierced the psychological $40 level, reaching $40.23 per ounce.  Platinum and palladium were also both up over 1% to $1,808 and $794, respectively.

Precious metal buyers had numerous reasons to be bullish including skyrocketing oil and food prices, the worsening situation with the European debt crisis, continuing conflicts in major oil producing countries and the ugly specter of a government shutdown in the U.S. due to the inability of Congress to come to grips with an exploding deficit and looming debt crisis (see Budget Fiasco Sends Wrong Message To U.S. Creditors).

Gold has now risen by over $31 per ounce this week and by $50 since March 28, breaking through resistance at the $1,450 level. Investors are seeking to protect their wealth from inflation and the continuing debasement of paper currencies as nation after nation continues to run huge deficits in an attempt to revive weak economies.  A glimpse of the end game to massive government deficits and liabilities is currently on display in Washington and the message is a resounding endorsement for diversifying out of paper money.  Politicians will not cut spending for a large variety of reasons, calling into question the future solvency of numerous sovereigns worldwide.

Silver has now advanced a spectacular $9.33 or 30% since the beginning of the year and shows no sign of slowing down.  According to the Silver Institute, world investment demand for silver skyrocketed by 40% during 2010 and was the primary reason for the huge 78% increase in silver prices last year.  Total fabrication demand, which accounted for 83% of silver demand last year,  increased by almost 13% despite the large rise in silver prices.

The looming global debt crisis and the printing of money has lead to surging investor demand for real assets.  Since late last summer when the Federal Reserve initiated its latest money printing campaign, the price of raw material prices as represented by the S&P GSCI Spot Index has soared by 35%.