The gold price hit a major milestone this week, breaking the US$2,300 per ounce mark for the first time ever.
The yellow metal's rise has been a long time coming, but in some ways it's been quicker than expected. I spoke with many experts at the Prospectors & Developers Association of Canada convention about a month ago, and while a number of them thought US$2,300 was in the cards for 2024, they didn't necessarily see it happening so fast.
Gold's increase came even as US Federal Reserve Chair Jerome Powell said the central bank needs to see more evidence that inflation is heading toward its 2 percent target before it begins cutting interest rates.
I've repeatedly heard from industry commentators that gold will really start moving when the Fed pivots, and it's notable to see it remain strong without any firm commitment on when that turnaround will happen.
Ross Norman of Metals Daily wrote an interesting article about what's going on — in it, he explains why gold's price jump this week has left him "non-plussed," running through various possible reasons for its increase:
"This is possibly the longest apology I have ever penned, but this gold rally mystifies me.
Quite possibly it is a combination of Chinese and official sector buying from other routes, coupled in some sectors with mounting uncertainty over US debt and its manageability."
While gold's ever-increasing price is grabbing headlines, silver shouldn't be forgotten. It broke through US$27 per ounce midway through the week, and after a brief pullback was back above that point on Friday (April 5) morning.
Experts often emphasize that silver tends to initially lag behind gold, but then outperforms once it gets going. Whether that holds true during this cycle remains to be seen, but this week's movement has definitely created some excitement.
Bullet briefing — Copper price jumps, uranium companies move forward
Copper prices hit 14 month high
Gold and silver weren't the only metals on the move this week — copper prices rose to their highest level in 14 months.
The red metal got a boost several weeks ago, when Chinese smelters agreed to cut output on short supply. Since then, growing awareness of the red metal's tightening supply/demand situation has provided further support.
I recently spoke with John Ciampaglia of Sprott Asset Management about copper's positive outlook, and I recommend checking out the interview if you'd like a more in-depth look at the market. He said he wouldn't be surprised to see prices be 10 to 20 percent higher in the next six to 12 months.
Paladin and Boss reach uranium milestones
In the uranium sector, two ASX-listed companies made progress this week. Paladin Energy (ASX:PDN,OTCQX:PALAF) achieved commercial production at its Langer Heinrich mine in Namibia, and Boss Energy (ASX:BOE,OTCQX:BQSSF) passed the final technical milestone needed for the restart of its Australia-based Honeymoon mine.
With prices for the energy fuel now at levels that can support more mining operations, supply is starting to come back online. However, the broad consensus is that it won't be enough to sate increasing demand for nuclear power.
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Securities Disclosure: I, Charlotte McLeod, hold no direct investment interest in any company mentioned in this article.
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