Recently, international gold prices surpassed $3000 per ounce, reaching an all-time high and drawing global market attention. However, alongside the surge in gold, silver has also shown impressive performance, hovering near key resistance levels, bolstered by institutions raising their year-end targets.
Analytical institutions have raised their year-end target for silver to $35 per ounce, higher than the previous forecast of $33. The spot price of silver has tested and breached the $34 resistance level, hitting a five-month high of $34.208 during intraday trading on March 18, just a step away from last year's 12-year high of $34.846.
With the continuous rise in gold prices, the market expects that silver could soon break past its previous highs and gain more attention. Meanwhile, the year-end gold target has also been raised to $2850, up from $2650, reflecting a sustained bullish sentiment towards precious metals.
Silver's strong performance is driven not only by the rise in gold but also by robust industrial demand. Data shows that the silver market has faced supply shortages for four consecutive years, and this year it may continue to experience severe supply-demand imbalances. Record-high industrial demand has provided good support for the silver market, pushing prices higher.
Despite gold's strong momentum, the market must remain cautious of short-term correction risks. Gold prices have soared from $2000 to $3000 in less than five years, while it took 12 years to rise from $1000 after breaking that level in 2008. Current market expectations suggest that the Fed's rate cuts might be less substantial than previously anticipated, and the record gold prices could impact physical demand, a trend already reflected in data from some Asian countries.
Despite the risk of corrections, there is still upward momentum in the market, especially if more ETF investors and speculative traders return to the market. If the Fed adopts a more aggressive rate-cutting approach, gold prices may continue to rise, further heating up the precious metals market.
