In the vibrant markets of China, silver is having a moment, currently trading at $26.24 per troy ounce – a cool $2.50+ above the rates in the West. Now, that’s a leap that caught our attention.
But here’s the plot twist – while silver is making waves, gold is stealing the show on the global stage. Gold prices are smashing records, driven by expectations of US interest rate cuts, a hunt for safe assets, and a buying frenzy by central banks and Chinese investors.
What’s raising eyebrows is the unusual divergence between gold and silver. Traditionally, they’re like two peas in a pod, rising and falling together. However, the gold/silver ratio is telling a different tale. It’s not normalizing, hinting that silver isn’t keeping up with its precious metal partner.
Why is this important? Because in times of global recessions, the gold/silver ratio tends to surge. Gold becomes a hedge against economic downturns, while silver, due to its heavy reliance on industrial use, struggles to match the demand as a precious metal.
Hold on, there’s more to the story. Copper, the silent player in our drama, is signaling caution as well. The copper/gold ratio is falling, echoing the concerns raised by the gold/silver duo. Gold demand is skyrocketing as a hedge against financial and macro risks, but copper isn’t playing along. The ratio has hit a multi-year low, mirroring the cautionary whispers of last October.
In a nutshell, the precious metals puzzle is painting a picture of a future with storm clouds on the horizon. Keep an eye on silver’s surprising climb, gold’s flight to new highs, and the cautionary tale told by the copper/gold duo.
Sources:
Silver Prices are Nearly 11% Higher Now in China:
The Price of #Silver in China 🇨🇳 is now trading at $26.24 a troy ounce or $2.50+ a troy ounce higher than spot prices in the west.
6,075 ¥ for a KG on Shanghai Metals Market: pic.twitter.com/cswnJUbFzY
— Peter Spina ⚒ GoldSeek | SilverSeek (@goldseek) March 6, 2024
Gold Price Surges to Record High
The price of gold has surged to a record high, driven by growing expectations of US interest rate cuts, investors hunting for haven assets and months of prodigious buying by central banks and Chinese investors.t.co/7CfARB4aQK
— Peter Spina ⚒ GoldSeek | SilverSeek (@goldseek) March 6, 2024
In recent years, gold/silver ratio surges when faced w/global recession risk/reality. Gold jumps on hedge demand while silver stays weak as industrial use falls off more than higher demand as other precious metal.
Critical fundamental warning about darkening future. pic.twitter.com/THpL9d9VDz
— Jeffrey P. Snider (@JeffSnider_EDU) March 6, 2024
And just like gold/silver ratio is high in 2024, copper/gold is sinking, too. Gold up to new highs while copper isn't moving, ratio has fallen to just about a multi-year low matching last October. pic.twitter.com/kxV3ORj8D1
— Jeffrey P. Snider (@JeffSnider_EDU) March 6, 2024