Gold At All Time High, Silver At $30. Now What?

Gold hit a new all-time high against the dollar this week, buoyed on by speculation surrounding Fed rates and the increasing likelihood of a Trump win. Let’s be honest, it was always going to be an interesting week given it began with the attempted assassination of a presidential candidate. 

Interestingly gold was down in overnight trading in the aftermath of the shooting but then in a delayed, yet bullish, reaction to the news gold rallied somewhat on Monday due to the raised political uncertainty and resulting safe haven demand. 

Amongst all this gold-hype silver remains above $30. Earlier this week we released another interesting conversation with the Silver Guru himself, David Morgan, this time with a focus on the silver miners. 

If you’re all caught up on that then take a look at our overview of silver demand and what's to come for the silver price in this compilation of some of our best silver ‘chat’ in recent months. 

What is driving gold?

Is it just Fed rates and presidential results, driving the gold price? Short-term, quite possibly. Long-term no. As strategists explained in a J.P. Morgan report this week, there is far more depth to this structural bull market in gold. 

“Many of the structural bullish drivers of a real asset like gold — including U.S. fiscal deficit concerns, central bank reserve diversification into gold, inflationary hedging and a fraying geopolitical landscape —have lifted prices to new all-time highs this year despite a stronger U.S. dollar and higher U.S. yields, [and] will likely remain in place regardless of the U.S. election outcome this autumn,”

Gold at new all-time highs may be a big red warning flag elsewhere. In times gone by gold hitting major milestones has often preceded worrisome economic events such as inflation surges and economic downturns. 

Elsewhere…Today the ECB has decided to leave interest rates unchanged, this came as a surprise to absolutely no one and gold is holding near all-time highs against the euro. In other Eurozone news President Ursula Von Der Leyen has been re-elected for a second-term as president of the European Commission, again a move which is likely designed to keep the waters calm.