On Monday, May 20, the gold price reached a record high of $2,450 per troy ounce in dollars. Since mid-April, the EUR/USD exchange rate has risen by approximately 2%, preventing a record high in euros, which remains at €73,374 per kilogram (as of April 12).

The death of Iranian President Ebrahim Raisi on Sunday, May 19, has raised concerns about potential instability in the Middle East, affecting the gold price. Along with other factors such as potential interest rate cuts in the US and significant gold purchases by central banks, Raisi's death was the main short-term driver of the gold price increase. Since Monday, the gold price has slightly corrected.

Invest in Gold

Although gold made headlines this year with a record-breaking rally, silver is performing better due to strong financial and industrial demand. Silver has risen by more than 29% this year (in euros), making it one of the best-performing major commodities. Despite this increase, silver remains relatively cheap compared to gold, with a current gold/silver ratio of 77, compared to the 20-year average of 68. On Tuesday, silver reached €961/kg, the highest level since September 2011.

China plays a significant role in the current silver rally. On May 21, the silver price in Shanghai was nearly 14% higher than in New York, with inventories continuously declining. While the Chinese market is buying up silver, investors in Europe and the US are lagging behind. This could cause additional stress on the paper precious metals markets, where entities like Bank of America hold large short positions (1 billion ounces), which is unusual given the global annual production of only 800 million ounces. The significant price difference between China and London/New York could lead to a further outflow of physical silver to China, putting pressure on Western markets.

Gregor Gregersen, founder of Silver Bullion, notes that customers considering gold are now more often buying silver, waiting for the gold-silver ratio to correct. In January, the gold-silver ratio was above 90, the highest since September 2022. Citigroup expects the ratio could fall to 70 if the Federal Reserve cuts interest rates and economic growth remains strong. If the gold price stays at €70,000/kg and the gold-silver ratio drops to 70, the silver price could rise to €1,000/kg!

Invest in Silver

This spring brings more than just sunshine; it also brings a brilliant opportunity for many GoldRepublic account holders! With the payout of vacation money at the end of May, just in time for summer, new opportunities arise. From Wednesday, May 22 at 12:00 PM to Thursday, May 30 at 23:59 PM, we offer you a 20% discount on transaction fees for all precious metal purchases. Don’t miss this golden opportunity to enrich your future. Invest wisely and start your journey to financial freedom with GoldRepublic!

Log in to your GoldRepublic account during the promotional period, place your order with the desired amount/weight and precious metal, and automatically receive a 20% discount on the transaction fees of your purchase order!

Don't have an account yet? Open an account at GoldRepublic today and start securing your investment in gold.

Open Account

Disclaimer: The information on this webpage is not considered investment advice or an investment recommendation.

Although we now know that inflation remains persistent in the US, I cannot ignore discussing this given the global impact of US monetary policy.

Fed officials expressed increasing concerns about inflation during their last meeting and showed no confidence in rate cuts. Minutes from the Federal Open Market Committee (FOMC) policy meeting held from April 30 to May 1 indicated that policymakers were worried about the right timing for easing. Despite some progress, inflation remained significantly higher than the 2% target. The FOMC unanimously voted to keep the interest rate unchanged in the range of 5.25%-5.5%. Consumers relied more on riskier forms of financing to make ends meet, posing downside risks to consumption. Markets lowered their expectations for rate cuts this year, with a 60% chance of the first cut in September and a slightly higher chance of a second cut in December. Earlier this year, the market even expected five rate cuts. Despite the persistently high interest rates, gold and silver continue to perform well.

China has announced a broad rescue package to tackle the property crisis, including easing mortgage rules and providing $42 billion in central bank funding to purchase unsold homes. This package lowers down payment requirements for homebuyers and encourages local governments to buy excess inventory from developers and convert it into affordable housing. While equity investors responded positively, it remains uncertain whether this will resolve the crisis, as the funding may not be sufficient. Despite these measures, real estate companies continue to struggle, risking unemployment or income loss for millions due to the stagnant construction sector.

In such a scenario, the central bank will need to intervene again, injecting billions into the economy through quantitative easing to save the situation. Chinese Yuan, dollars, euros... It all seems to be easily printed. This high degree of money printing appears to be driving nearly all assets to record highs, which represents a further decline in the purchasing power of currencies. Do you have enough assets that cannot be easily printed?

Invest in Gold