Gold Tops $2,400 and Silver Jumps 10% During Another Bullish Week for Metals
Gold and silver extended their strong rallies with another bullish week as precious metals continue to outperform most other commodities. A weaker dollar index (DXY) was a positive catalyst for currency hedges. Not only did we see precious metals rallying but Bitcoin also jumped higher and gained more than 10% since last Friday.
A cooler-than-expected CPI report for April sent equities higher with both the S&P 500 and the NASDAQ 100 hitting new all-time highs during the week. Consumer prices came in 3.4% higher than a year ago and 0.3% higher than in March. Both readings were in line with analyst expectations with the year-over-year reading coming in slightly lower.
On the geopolitical front, the ominous embrace between Chinese Premier Xi and President Putin surprised many. A relationship between the two superpowers could be bearish for the US dollar which would ultimately be bullish for gold.
Gold is looking to make new all-time highs this summer as it is just a stone’s throw from the previous high set in April of $2,431.55. Analysts are predicting a hot summer quarter for gold and silver as we head into the election in the fall.
Speaking of silver, the metal made an 11-year high this week after gaining more than 10% for the week. Silver futures hit their highest price since February 2013 and there doesn’t look to be any end in sight to the current rally.
One more metal that was making notable moves this week was copper, which hit a fresh new all-time high price for futures contracts. Copper is in high demand as it is used in the construction of data centers, rechargeable batteries, and electric vehicles.
For the week, gold COMEX June 2024 futures contracts closed at $2,419.80. Silver COMEX July 2024 futures contracts settled at $31.775 and copper July 2024 futures contracts settled at a price of $5.08.
Precious Metals Stocks and ETFs Weekly Performance
As can be expected with spot metal prices at or near all-time highs, gold and silver mining stocks did well too. The Kitco MIGL Gold Miners Index added eight basis points this week and closed at a price of 28.34. Friday was the best-performing session for the index, with 17 of the 20 components trading higher. Alamos Gold (NYSE: AGI), New Gold (NYSE: NGD), and Agnico-Eagle Mines (NYSE: AEM) were among the strongest performers.
We saw more bullish options flow from institutions into gold names this week. Newmont (NYSE: NEM) saw a massive buyer of December calls at the $47.50 strike price. This indicates that this gold bull likes the rally to extend through to the end of the year. In addition, there were lots of bullish call sweeper orders for the Van Eck Gold Miners Index ETF (NYSEARCA: GDX) and the Van Eck Junior Gold Miners Index ETF (NYSEARCA: GDXJ) this week. GDX saw 9,000 December call options bought with a strike price of $43.00 while GDXJ saw a massive order of 16,000 $55 to $60 call spreads for August.
Freeport-McMoran (NYSE: FCX) continued its strong performance adding more than 4.0% during the week. It was disclosed in the Duquense Family Office 13F that Stanley Druckenmiller had increased his exposure to Freepor-McMoran by more than 190% adding over 907,000 shares of FCX last quarter.
Spot gold ETFs rose again this week with the iShares Gold Trust (NYSEARCA: IAU) and the SPDR Gold Trust (NYSEARCA: GLD) both adding about 3.0%. Both ETFs have returned more than 17.0% for the year so far and are trading at all-time highs.
The Kitco MISI Silver Miners Index added a whopping 19 basis points on Friday, closing the week at a price of 68.4. All nine components of the index closed the week in the green with strong gains made by Hecla Mining (NYSE: HL), Endeavour Silver (NYSE: EXK), and First Majestic (NYSE: AG). The iShares Silver Trust (NYSEARCA: SLV) gained more than 6.0% on Friday and 11.5% for the week.
What’s in Store Next Week for Precious Metals?
Next week all eyes on the market are on NVIDIA (NASDAQ: NVDA) earnings on May 22nd after the markets close. Fed Chairman Powell speaks on Sunday while various other Fed Presidents speak throughout the week. The May FOMC minutes will be released on Wednesday so expect a quiet start to the week with a volatile close.