Gold and silver prices have soared sharply: why precious metals are getting more expensive

Today, September 1, the price of silver has exceeded $40 per ounce for the first time since 2011, while gold has approached its historical maximum, reports Bloomberg.

The agency notes that the rise in precious metal prices occurred against the backdrop of expectations of a rate cut by the U.S. Federal Reserve (Fed) and a weakening dollar. In particular, the U.S. currency was trading near its lowest level since July 28 against major currencies. This caused the prices of precious metals in dollars to decrease for foreign buyers.

As of today, spot prices of silver increased by 2.6%, reaching nearly $40.76 per ounce and increasing its annual gain by about 40%.

At the same time, the price of gold surged by 1.2%, which is slightly below its April record, which exceeded $3500 per ounce.

"The price of silver is rising in response to expectations of lower rates, while limited supply in the market contributes to the ongoing upward trend," said KCM Trade's chief market analyst Tim Watterer.

Bloomberg notes that over the past three years, prices for gold and silver have more than doubled, driven by rising risks in geopolitics, business, and global trade.

At the same time, silver has outpaced gold in growth since the beginning of the year, as investors have been putting money into exchange-traded funds (ETFs) backed by the white metal. In August, investment volumes in silver ETFs increased for the seventh consecutive month.

"The Fed's rate cuts, the weakening of the U.S. dollar, increased inflow of funds into ETFs, and improved import conditions from India should support gold and silver," commented Morgan Stanley analysts Amy Gauer and Martein Rats in an email.

They believe that gold is expected to rise further by about 10%, while silver is trading nearly at forecast, with the potential to exceed it.

In addition, precious metals have risen sharply amid fears that they may face U.S. tariffs, after silver was added to Washington's list of critical minerals last week, which already includes palladium.

The spot price of gold increased by 0.7% to $3471.04 per ounce at 11:37 London time, marking a rise for the fifth consecutive day. Silver rose by 2.3%, palladium by 1.7%, and platinum by 1.8%.