July 17, 2024

Gold Hits All Time High and Silver Breaks $40 as Precious Metal Demand Soars

Anything but paper dollars was the theme this week as investors rushed into anything of tangible value.  Gold, silver, oil and commodities of all types have been skyrocketing since last August when the Federal Reserve announced its second round of quantitative easing.

Gold closed at an all time high of $1,469.50 as measured by the London PM Fix Price and silver hit a 31 year high closing the week at $40.22.  Some analysts cautioned that the rapid rise in gold and silver prices could lead to a pullback, but overbought markets tend to defy such logic.  Gold has decisively broken through resistance at the $1,450 level and silver looks ready to challenge the all time high of $48.70 reached in 1980.

Precious Metals Prices
Fri PM Fix Since Last Recap
Gold $1,469.50 +51.50 (+3.63%)
Silver $40.22 +2.59 (+6.88%)
Platinum $1,803.00 +30.00 (+1.69%)
Palladium $798.00 +26.00 (+3.37%)

The surge in precious metals prices reflects the obvious conclusion that developed nations of the world are on a trajectory with a potentially devastating debt crisis.  The budget antics in Washington make it clear to any impartial observer that spending will not be cut and the parabolic growth of debt will continue.  No one knows how the looming debt crisis will ultimately play out for the Nation, but one certain outcome is that the dollar’s purchasing power is likely to diminish greatly (see Ron Paul Talks About Horrendous Currency Debasement).

Gold rose by $51.50 on the week and is up over $300 per ounce over the past year.


Silver has been the standout performer over the past year, increasing by over 122% since last August.  This week was no exception with silver sprinting past the $40 mark and gaining 6.9% on the week. Despite the large increase in the price of one ounce of silver, the Silver Institute reports that both investment and fabrication demand soared last year.  During 2010, world investment demand for silver increased by 40% and fabrication demand (which accounts for 83% of total silver demand) rose by 13%.

Platinum and palladium also rose on the week, recouping the price correction experienced after the Japanese earthquake.  Platinum rose by $30 on the week to $1,803 while palladium rose by $26 to $798.