Shares in precious metals miners, including Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF), Fresnillo PLC (LSE:FRES) and Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) were in demand on Monday as gold edged closer to a new record high and silver traded above $40 an ounce for the first time since 2011.
The rally in spot prices has been building for months, but momentum appears to be accelerating.
Gold is now within touching distance of the psychological $3,500 level, while silver is up 40% this year, fuelled by a combination of safe-haven demand and rising industrial use.
Nick Cawley, contributing analyst at Solomon Global, sees further upside for both metals. He expects gold to test $3,750 an ounce by year-end, with silver targeting $43.80 and $44.23, levels last reached during its 2011 peak.
Central banks are a big part of the story. Many have been shifting reserves away from US Treasuries and into gold, in a marked change in allocation behaviour.
A recent report by Crescat Capital found that official gold holdings have now overtaken US Treasury holdings for the first time in nearly three decades.
“The fundamental drivers supporting both metals remain robust,” Cawley said, pointing to persistent geopolitical risk, a wave of interest rate cuts from major central banks and a clear trend towards diversification away from the dollar.
Silver is also finding support from strong demand linked to green technologies and electronics manufacturing. Though often overshadowed by gold, its dual role as both a monetary and industrial asset has helped to drive prices higher.
Endeavour led the FTSE 100 with a 3.7% gain, with Fresnillo up 1.6%.