Gold and silver firm on futures’ demand

In a shortened trading week, and against a global background of rising bond yields gold and silver have continued to edge higher. This is an important change in investment thinking.

Gold rose by $32 on the week to $2670, while silver rose by 21 cents to $30.12 on futures buying. Gold’s Open Interest rose by about 15,000 contracts while silver’s OI was marginally higher. Gold’s performance is remarkable in that it has been rising while global bond yields have also risen. Clearly, there is a shift in thinking taking place.

We are at an interesting juncture in credit markets, with a growing realisation that dollar interest rates are unlikely to fall much, if at all, and that they might even rise instead by the end of 2025. This logic comes with an appreciation that inflation under Trump’s avowed policies will continue to rise, or more accurately described, the purchasing power of the dollar will continue to decline.

The interest rate cat has been let out of the bag with dire consequences.