The price of gold and silver have soared higher this week due to a perfect storm attracting both short-term and long-term investors. While gold edges closer to its all-time high price level, silver prices have surged more than 20% in just five days.
Did you know you can speculate on the price of gold and silver using Contracts for Difference (CFDs)? This allows you to potentially profit from both rising and falling markets.
The precious metals market has received a boost from its status as a safe-haven flow and other factors. Rising US-China tensions have helped investors pour into the traditional safe-haven of gold, after the US closed a Chinese consulate in Houston, Texas, only for the Chinese to retaliate and close a US consulate in China.
However, the US dollar has also played a part in the rise of both gold and silver. Investors have shunned the dollar due to a variety of factors such as trade wars and a resurgence of Covid-19 infections in some states forcing them to go back into lockdown.
Many analysts also point to some governments aiming for a 'green recovery'. As silver has a wide range of industrial uses, most notably a key component in electric vehicles and solar panels, funds have started to allocate capital towards the metal.
Veteran trader and co-founder and partner of Mobius Capital Partners, Mark Mobius, believes gold could increase further and soar past its all-time high price level of around $1,920 due to trade tensions between the US and China showing no signs of slowing down.
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