Gold and silver prices rose to new highs on Monday.
Gold last traded at a record value of $4,445.8 per ounce, while spot gold traded at $4,414.99. Prices have increased nearly 70% since the beginning of the year.
The metal has soared this year, setting consecutive price records as risk assets lose ground. Gold is typically considered a safe asset in times of economic or geopolitical turmoil.
Silver is typically pegged to gold and last traded at $68.96 per ounce, while spot silver was $68.98. Prices have increased 128% since the beginning of the year.
In the US, US-listed stocks of gold and silver miners rose in pre-market trading. iShares MSCI Global Gold Miner ETF The last seen was almost 2.7% higher.
Optimism returned to AI stocks in pre-market trading following the Federal Reserve’s long-awaited interest rate cut on Dec. 10, but economic speculation for next year is likely to send global investors back on the defensive as they look to balance their portfolios.
Matthew McLennan, head of the global value team at First Eagle Investments, said that with large budget deficits in the US, UK, Europe, and even Japan and China, “the monetary value of gold is definitely re-emerging.”
“The value of gold as a potential financial hedge is re-emerging,” McLennan told CNBC’s “The Exchange” on Dec. 17. “Gold has been underperforming relative to the nominal assets that you want to use as a potential hedge, but it has become more reasonably valued, and I think other precious metal complexes have followed suit with some leverage.”
Investors are also keeping an eye on the race to nominate the next Federal Reserve chairman, as the central bank’s independence and credibility have been called into question by President Trump’s repeated pressure on its current chairman, Jerome Powell.
“What we’re very focused on here is the long-term fiscal credibility of the United States, because I think that’s the prerequisite for having an independent Fed and having a reasonable chairman,” McLennan added.
He also focuses on wage inflation. “So what really matters going forward is whether the number of job openings, which have been increasing recently, will keep up with the rise in corporate profits,” he said.
