Gold regains momentum during Asian trading, silver continues to outpace the yellow metal

(USAGOLD – 7/31/2020) –  Gold regained momentum during Asian trading hours as investors sought refuge from further depreciation in the dollar, a major reduction in U.S. GDP, and accelerating COVID-19 case numbers across the globe. Fed Chairman Powell’s emphasis on fiscal spending during Wednesday’s press conference is also adding to gold’s appeal. There is a direct long-term correlation between growth in the aggregate federal debt and a rising gold price (Please see this morning’s post, “The government put is a tailwind for gold” at our Today’s top gold news and opinion page.) Gold is up $19 on the day – just under 1% – at $1978.

It is silver though that is increasingly catching the attention of traders and market analysts.  Now up 76¢ on the day – or 3%, it continues to outpace gold which has posted solid gains in its own right over the past several months.  (Please see our Charts of the Day immediately below). Goldman Sachs’ most recent gold forecast has received a great deal of attention over the past few days, but its silver call received only cursory notice. The Jeff Currie-led team of analysts sees the white metal at $30 “on a 3/6/12 month horizon, pulled upward by higher gold prices and better prospects for silver industrial demand.” It suggests the possibility of the gold-silver ratio falling to 77. With its target for gold set at $2300, it “would imply a $30/toz silver price.”

Chart[s] of the Day

Silver Prices
Twelve months through July 30, 2020

line chart showing silver price performance in percent over the past twelve months 7-30-2020

Silver Prices
Year to date through 7/30/2020

line chart showing silver price performance year to date in percent as of 7-30-2020

Gold-Silver Ratio
Gold-silver ratio through 7/30/2020

line chart showing gold silver ratio 1998 through July 2020

Charts courtesy of Trading • • • Click to enlarge

Chart note:  The gold-silver ratio has fallen dramatically since the beginning of April but still far above its long-term average indicating there is still some room for improvement.  Silver is up 29.03% year to date and 30.36% over the past 12 months.  Premiums are rising on silver bullion coins the result of increased demand and curtailed production at world mints. Though silver American Eagle bullion coin premiums have risen significantly over the past few days, silver Canadian Maple Leafs are still available at reasonable premiums.  Please call our Trading Desk for details 1-800-869-5115 x #100.

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