Gold notches new all-time high above $4,100, silver soars to first record since 1980

[Silver, gold and oil]
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Gold and silver futures surged to fresh highs Monday, with gold breaking through the $4,100/oz level for the first time and silver surpassing the previous record set in January 1980, as a flare-up in U.S.-China trade tensions and prospects of further U.S. interest rate cuts drove up demand for precious metals.

Front-month Comex gold (XAUUSD:CUR [https://seekingalpha.com/symbol/XAUUSD:CUR]) for October delivery jumped $132.70/oz, or +3.3%, to $4,108.60/oz, the largest one-day dollar gain on record and biggest percentage gain since April 16, and front-month Comex October silver (XAGUSD:CUR [https://seekingalpha.com/symbol/XAGUSD:CUR]) gained $3.192/oz, or +6.8%, to $50.13/oz, the largest one-day dollar gain since January 23, 1980 and biggest percentage gain since March 13, 2023.

Front-month gold and silver are up 56.3% and 74.2%, respectively, so far this year, and have gained a respective 6.9% and 8.4% in October.

Analysts are attempting to evaluate how much upside precious metals have left.

While a pullback may come soon, prices should continue to climb, Bank of America said in a note: "While the bullish fundamental backdrop remains, we are concerned about positioning. We see the risk of a correction near-term, but still expect further upside in 2026, with gold and silver potentially rising to $5,000/oz and $65/oz, respectively."

Julius Baer's Carsten Menke said he remains constructive on gold and silver, and any fatigue among speculators "should not cause a correction, but rather a short-term and temporary setback as we still see a favorable fundamental backdrop," as the main drivers behind the record rally - slowing U.S. growth and lower interest rates, and a weaker dollar - remain unchanged.

Standard Chartered's global head of commodities research Suki Cooper raised her gold forecast for next year to an average of $4,488/oz, saying the rally still has legs, "but a near-term correction would be healthier for a longer-term uptrend."

"The most likely path for silver prices in the medium term is to rise further since silver benefits from the same private investment flows lifting gold amid Fed cuts," Goldman Sachs analysts wrote. "However, in the near term, we see greater volatility and downside risk than for gold, reflecting silver's smaller and less liquid market."

The silver market is less liquid and ~9x smaller than the gold market, amplifying moves in the silver price, according to Goldman. "Without a central bank bid to anchor silver prices, even a temporary pullback in investment flows could trigger a disproportionate correction, as it would also unwind the London tightness that drove much of the recent rally."

London silver spot prices are now commanding a hefty premium over Comex silver futures in Chicago due to the physical shortage, as silver inventories held in London have declined by a third since 2021; Bloomberg reported Monday that traders were booking cargo slots on airplanes to fly physical silver to London and exploit the disparity.

ETFs: (NYSEARCA:GLD [https://seekingalpha.com/symbol/GLD]), (NYSEARCA:GDX [https://seekingalpha.com/symbol/GDX]), (GDXJ [https://seekingalpha.com/symbol/GDXJ]), (NYSEARCA:IAU [https://seekingalpha.com/symbol/IAU]), (NUGT [https://seekingalpha.com/symbol/NUGT]), (PHYS [https://seekingalpha.com/symbol/PHYS]), (GLDM [https://seekingalpha.com/symbol/GLDM]), (AAAU [https://seekingalpha.com/symbol/AAAU]), (SGOL [https://seekingalpha.com/symbol/SGOL]), (RING [https://seekingalpha.com/symbol/RING]), (BAR [https://seekingalpha.com/symbol/BAR]), (OUNZ [https://seekingalpha.com/symbol/OUNZ]), (NYSEARCA:SLV [https://seekingalpha.com/symbol/SLV]), (PSLV [https://seekingalpha.com/symbol/PSLV]), (SIVR [https://seekingalpha.com/symbol/SIVR]), (NYSEARCA:SIL [https://seekingalpha.com/symbol/SIL]), (SILJ [https://seekingalpha.com/symbol/SILJ])

MORE ON GOLD AND SILVER

* Is It Too Late To Hop On The Gold Train? [https://seekingalpha.com/article/4829597-is-it-too-late-to-hop-on-gold-train]
* Silver Surges To $51 Amid Supply Squeeze And Safe-Haven Demand [https://seekingalpha.com/article/4829538-silver-surges-51-supply-squeeze-safe-haven-demand]
* Gold Demand Is Not Coming From The U.S. [https://seekingalpha.com/article/4829519-gold-demand-is-not-coming-from-the-us]