Precious Metals Rally Continues Amid Weak US Labor Market
The precious metals market has continued its rally, with gold and silver prices extending their gains for several sessions. The SHFE gold futures rose by 1.887% to 961.86 yuan/g, while COMEX gold extended gains into a third straight session, up 0.89% at $4,459/oz. Silver also saw significant gains, with the most-traded SHFE silver futures rising by 3.08% to 16,069 yuan/kg and COMEX silver extending its gains for the third straight session, up 0.39% at $65.525/oz.
The rally was driven by a combination of factors, including the weak US labor market data, which led to lower expectations for US Fed interest rate hikes. Additionally, gold ETFs saw fund inflows, and investment buying was active on China's futures market. Central banks around the world continued to allocate to gold assets, with the PBOC increasing its gold holdings for the 21st consecutive month.
However, some institutions remain cautious about the outlook for precious metals. Scott Rubner, a strategist at Citadel Securities, recommended that investors allocate to structural gold positions, citing multiple tailwinds driving the market higher. UBS also expects gold prices to rise to $5,000/oz in H1 2027.