Will gold and silver prices keep rallying to new highs?

Gold and silver prices continue to rally to new highs this week, with precious metals benefitting from investors eyeing up safe haven assets as global equities see recovery stall after a second wave of Covid-19 cases emerge, prompting central banks to take further action.

Earlier this week, gold broke above $2000 and silver crossed the $27 resistance level. Both metals continue to find support as they both trade higher, with analysts believing gold could hit $3000 over the next 18 months, while silver could hit $30 in a matter of weeks if buying momentum is maintained.

At the time of publication gold is trading at $2062 an ounce, while silver is changing hands at $28.34 an ounce.

Bank of America lifts metals forecast again

Gold prices pushed to new all-time highs again this week, breaking above the a key psychological resistance level of $2000 an ounce on Wednesday.

But the rally is far from over for gold and silver, according to Bank of America (BoA), who believe that the stage is set for even more upside for precious metals in 2020 and beyond.

In fact, BoA is so bullish about metals that the lender raised its average 2021 forecast for gold from $2012 to $2159 an ounce and lifted silver from $21.95 to $30.49.

‘Continued fiscal spending as governments are mending the damage from Covid-19, backstopped by central banks means that interest rates will remain low, at the same time as the economy reflates,’ Jalonen said in a note.

FOMO could help lift silver price outlook

With precious metals surging to higher highs amid the coronavirus pandemic and with equities proving too risky and unpredictable during these uncertain times, investors are keeping a close eye on gold and silver.

And with reports coming out daily about precious metals ongoing rally, many more investors are likely to continue piling in to the market out of a “fear of missing out” (FOMO).

The real test for silver markets is whether investor sentiment is bullish enough to push it above the psychological $30 benchmark, which is a key resistance level for the metal.

But with central banks like the US Federal Reserve all too eager to flood markets with fresh rounds of stimulus to offset economic impact of Covid-19, currencies will continue to devalue and safe haven assets like gold and silver will attract more investment.

Gold uptrend remains intact, yet key resistance lies ahead

Silver prices have certainly been lifted higher by gold, which has been on an impressive uptrend of late, with the precious metal hitting record highs on a near daily basis, according to Josh Mahony, senior analyst at IG.

‘While the price has been on the rise in early hours today, we are seeing it turn back below the $2056 level,’ he said.

‘A break through that previous peak would signal a continuation of the uptrend, although ultimately this pullback will be seen as a short-term phenomenon unless we see a break back below the $2029 low,’ Mahony added.

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