Commerzbank analyst Norman Liebke says that gold and silver have fallen because new US attacks in the Gulf strengthened the opposite relationship with oil. When energy prices go up, it causes more inflation and worries about interest rates, which hurts metals that don't pay interest. But he thinks things will calm down, which should help both gold and silver, and he expects their prices to go back up by the end of the year.
Inverse oil link and de-escalation upside.
The price of gold dropped by almost 2% after the recent US military actions in the Persian Gulf. Silver also dropped by about the same amount. Like in the past few weeks, the pattern where gold and silver prices move in the opposite direction of oil prices still seems to be happening, at least mostly.
If there are new risks of things getting worse in the Iran conflict, the price of gold usually goes down. This is because higher energy prices can lead to more inflation, which might cause interest rates to go up. Since gold doesn't give any interest, it becomes less appealing to investors. However, if tensions ease, it usually helps the gold price go up. That's why we think the price of gold is likely to increase again by the end of the year.
At the same time, the price of silver moves almost like the price of gold; the ratio of gold to silver has stayed between 60 and 65 since the end of January — when the risk of things getting worse went up a lot — and hasn't changed much in the past two weeks.
We also think the price of silver could go up if the situation calms down. However, even if the war ends right away, it might take some time before things get back to normal.
Inverse oil link and de-escalation upside.
The price of gold dropped by almost 2% after the recent US military actions in the Persian Gulf. Silver also dropped by about the same amount. Like in the past few weeks, the pattern where gold and silver prices move in the opposite direction of oil prices still seems to be happening, at least mostly.
If there are new risks of things getting worse in the Iran conflict, the price of gold usually goes down. This is because higher energy prices can lead to more inflation, which might cause interest rates to go up. Since gold doesn't give any interest, it becomes less appealing to investors. However, if tensions ease, it usually helps the gold price go up. That's why we think the price of gold is likely to increase again by the end of the year.
At the same time, the price of silver moves almost like the price of gold; the ratio of gold to silver has stayed between 60 and 65 since the end of January — when the risk of things getting worse went up a lot — and hasn't changed much in the past two weeks.
We also think the price of silver could go up if the situation calms down. However, even if the war ends right away, it might take some time before things get back to normal.
