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Silver, Gold Diverge for First Time in Days After Rallying Together

Published 07/23/2020, 04:08 PM
Updated 07/23/2020, 04:09 PM
© Reuters.

© Reuters.

By Barani Krishnan

Investing.com - Gold came within a few dollars of hitting $1,900 an ounce on Thursday as the yellow metal entered what appeared to be the last lap of gold bugs' target for a new record high.

Silver, meanwhile, settled down for the first time in four days, diverging the first time this week from its joint rally with gold as the precious metals set continuous price milestones on assurance of stimulus from central banks worldwide to fight the coronavirus.

Gold futures on Comex settled up $24.90, or 1.3%, at $1,890 per ounce. That was the highest since September 2011, when Comex gold hit a record high of $1,911.60.  

Comex silver settled down 15.60 cents, or 0.7%, at $22.988 per ounce. In Wednesday’s session, it hit $23.345. That was the highest for silver since September 2013, when it got to $24.46 an ounce on Comex.

Gold’s continued rally on Thursday came on the back of the dollar’s drop, as indicated by the Dollar Index, which ties the greenback to a basket of six currencies. Renewed U.S.-China tensions also boosted gold’s safe-haven appeal.

“Gold’s rally is accelerating as the dollar slumps and coronavirus concerns heighten amid intensifying tensions between Beijing and Washington,” said Ed Moya of New York-based OANDA.

“Too many risks to the global outlook means gold might not struggle to capture the psychological $1,900 level this week.  If Asia continues to see steep rises with infections, there will be little hope that the U.S. and Latin America will get the virus under control.”

Gold's reach toward $1,900 came amid data showing that some 1.4 million Americans filed for first-time unemployment claims last week, as a new wave of coronavirus infections continued to overwhelm the world’s largest economy that just emerged from lockdowns two months ago.

The United States recorded more than 915,000 Covid-19 cases over the past two weeks, more than the number reported for all of June.

Top U.S. pandemics expert Anthony Fauci said earlier this month that the daily case growth could reach 100,000 without proper social- distancing and other safety measures. 

Nearly 4 million Americans have already been infected by the COVID-19 so far, with a death toll reaching above 143,000, according to Johns Hopkins University.  A new model by the University of Washington also predicts 200,000 coronavirus deaths in the United States by Oct. 1, casting further doubts on economic reopening from lockdowns. 

The U.S. economy shrank 5% in the first three months of 2020 for its sharpest decline since the Great Recession of 2008-09, as most of the 50 states in the country went into lockdown to stem the outbreak of the virus. While most businesses have reopened over the past two months, economists still warn of a double-digit recession by the second quarter — meaning job losses could continue.

Latest comments

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silver pumped 15% in two days and sees a red day and that is a "divergence" from gold? quit with this garbage headline. the have both been running up for months
Eddie Glass or whatever your real name is. Despite the pseudonym you've assumed, I think you have a serious case of myopia on top on mental imbalance. Each time you try and sound sarcastic with me, you end up sounding even D.U.M.B.E.R. Any intelligent person reading the headline can see that it's the "first divergence in days" -- or, as specified in the story, the first for this week..
fed print .gold go up .so easy yet so complicated according to your anaylcist
JDST calls.
The divergence is simple. Silver mining cost margins are much tighter than gold. Silver mining companies keep back supply when margins are being crunched to await more favorable market pricing. When that pricing arrives at an acceptable ROI, they release the surplus into the market which will ultimately put a check on silver prices ahead of gold. just my guess about it.
Who has an idea or theory on when the rally will be over?🤔
When frankenmoney is transmuted back into fairy dust. :)
After the next trillion dries up and once the big money starts the selloff
Gold will go up long term as the dolar devalues, but there will be pullbacks after periods of overbought
gold's up but gold miners are down...anyone knows the reason?
I doubt it, but now that you mention Bitcoin, it’s also likely undervalued. The Fed wasn’t printing money at a ridiculous rate and devaluing the dollar in 2017. Gold began rising a few months ago when real interest rates turned negative. You can justify $2,600 at an inflation-adjusted rates.
Today was a random reopening rally despite the highest ever daily US infections were reported and Tmp cancelled the Repub convention in FL. Value and trash like airlines and banks outperformed, and miners got caught up in that. A lot of the miners in GDX and GDXJ have not been hedging in anticipation of rising spot cuz real interest rates went negative. If they did hedge, they’ll be rolling off, which would then provide massive earnings leverage, esp to SIL and SILJ producers given Ag’s massive recent outperformance.
Direxion levered ETFs are for DAILY use by active traders. Returns are compounded and dont necessarily work if they’re held overnight. If you’re not active, just buy GLD after it corrects back to 1800.
Gold today high 1918
abusoultly correct
today high rate of gold 1889
Change headline. Silver rallied 9% yesterday and 7% previous day!! There is no divergence just a normal push back. Gold and silver are breaking the roof this week, together
Yes, but silver FELL today. Till then, they rallied together. That's why the divergence in the headline. Thanks.
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