Gold extends record, silver jumps to 12-year high as precious metals outperform stock market

Gold and silver showed no signs of slowing their rise on Monday as investors continue to invest in precious metals.

Gold futures (GC=F) hit new records, rising as much as 0.8% and hovering near highs of $2,750 an ounce. Silver futures (SI=F) rose more than 3% before paring gains, briefly topping $34 an ounce, their highest in 12 years.

The two precious metals have outperformed broader markets, with gold bullion up 26% year-to-date and silver up 35% over the same period, compared to a 19% rise in the S&P 500 (^GSPC) since the start of 2024.

Central bank purchases, which reached a record level in the first quarter of 2024, have been one of the biggest drivers of the precious metal's rise this year. Analysts at BofA believe that gold has overtaken the euro to become the world's largest reserve asset after the US dollar.

According to the World Gold Council, investors also flocked to physically backed gold exchange-traded funds (ETFS), with inflows increasing for three months in a row.

“I think it's the falling inflation expectations and also the asset rotation that tends to do well with a more dovish Fed,” Phil Streible, chief market strategist at Blue Line Futures, told Yahoo Finance on Monday morning.

The strategist expects the price of gold to reach $2,850 by the end of the year.

Meanwhile, silver rose after gaining more than 6% on Friday. JPMorgan analysts pointed to sentiment at the recent London Bullion Market Association/London Platinum and Palladium Market conference, where participants predicted an average price of $45 an ounce for the gray metal next year.

“This bullish view is based on a sense that silver is undervalued relative to gold, less crowded, and supported by diverse, diverse applications of demand,” JPMorgan analysts wrote on Friday.

Silver is used in various industries, from electronics to fuel cells in automotive components and solar panels. Analysts believe the metal faces uncertainty if former President Donald Trump wins the presidential election.

“We are bullish on silver ourselves, but for this strong silver outperformance to materialize we will likely need to see further increases in industrial metals prices in 2025, which could be complicated early next year despite a Trump presidency and a hard line on tariffs .” “China’s stimulus plan,” the note reads.

Ines Ferre is a senior business reporter for Yahoo Finance. Follow her to X at @ines_ferre.

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