Commodity Roundup: Gold and Silver Make Weekly Gains as Trump 2.0 Era Begins
As President-elect Joe Biden’s transition into the White House officially began this week, commodities markets responded by making significant gains. Among the notable winners were gold and silver, which closed out the week with impressive gains.
Gold Soars
Gold prices skyrocketed to their highest level in nearly two weeks, with a weekly gain of 1.3%. The precious metal rallied as investors sought safe-haven assets amid ongoing uncertainty surrounding the transition of power in Washington D.C. and the ongoing pandemic. The U.S. 10-year Treasury yield also plummeted to a record low, further boosting the appeal of gold.
The week’s gains in gold were particularly pronounced, with prices surging to $1,874 per ounce on Friday. This represents a significant 2.1% increase over the previous week’s close.
Silver Also Sees Strong Gains
Silver, often seen as a proxy for the broader economy, also made a strong showing this week. The precious metal surged 2.5% over the course of the week, closing at $24.38 per ounce. This represents the metal’s highest level since June 2020.
The week’s gains in silver were fueled by a combination of factors, including the declining U.S. dollar and speculation surrounding the impact of the upcoming Biden administration on the economy. Silver is often seen as a bellwether for economic sentiment, and its recent gains suggest that investors are growing increasingly optimistic about the economy’s prospects.
Other Commodity Winners
While gold and silver stole the headlines, other commodities also saw significant gains this week. Natural gas prices rallied 4.5% amid concerns over winter weather and expectations of increased demand. Copper prices also surged 2.3% as optimism surrounding the economic outlook and expectations of increased demand from the industrial sector.
Implications for the Trump 2.0 Era
As President-elect Biden prepares to take office, commodities markets are reflecting growing uncertainty about the future. The Trump administration’s policies, including the recent tax cuts and deregulation efforts, have had a profound impact on commodity prices. However, the uncertainty surrounding the new administration’s approach to trade and energy policy is causing investors to seek safe-haven assets such as gold and silver.
While it remains unclear what the new administration’s policy priorities will be, one thing is certain: the commodities market will continue to be shaped by the ongoing shift in global politics and economic policy. As the world waits with bated breath to see what the Trump 2.0 era will bring, investors are likely to remain cautious, opting for safe-haven assets to mitigate risk.
