XAGUSD – Daily Chart
The price of XAG soared above the all-time high mear $42.50 yesterday and that has the potential to spur further gains in the metal. The previous high will act as support.
Silver is following the recent strength of gold as investors price in geopolitical instability and also see lower interest rates boosting the price of metals.
As the US election approaches, some high-profile business commentators are concerned that neither candidate is talking about the country’s budget deficit woes. That is helping to boost the price of safe haven assets.
The US budget deficit grew to $1.833 trillion for 2024, the highest since the pandemic, as interest payments on federal debt exceeded $1 trillion for the first time and spending grew for Social Security retirement, health care, and the military.
Meanwhile, the Committee for a Responsible Federal Budget, has estimated that Trump’s plans would add $7.5 trillion in new debt, more than twice the $3.5 trillion envisaged from Harris’ proposals.
Neither candidate is talking of measures to right the ballooning debt and investors are turning to gold and silver as they fear the US dollar losing its purchasing power. The biggest driver of the 2024 deficit level was a 29% increase in interest costs to $1.13 trillion due to a combination of higher interest rates and more debt.
However, Larry Fink, CEO of asset management giant BlackRock, said that growth in private markets could mitigate the economic impact of deficits and high government debt.
Speaking at the Securities Industry and Financial Markets Association, he said rising US debt is a “big problem” but that private capital markets can help the economy grow without adding to the deficit.
The real risk would be a slowdown in growth and that could see even more flows into alternative assets such as Bitcoin and gold/silver.