Francisco Branch, head of global commodity derivatives research at Bank of America Securities (NYSE:BAC), said that while the current decline in precious metals prices is due to easing geopolitical tensions in the short term, he expects gold and silver prices to rise further in the second half of 2025.
In an interview with CNBC, Branch said: "We expected gold prices to reach $3,500 in the first half of this year, and they did reach that level. We believe the market is currently in a correction that could last for several months. We remain bullish on the long term and see prices exceeding $4,000 per ounce later this year or in 2026. However, we are currently in a correction as the extreme uncertainty we have seen in recent months has subsided."
Blanche added, "We have come close to $3,500 several times, but to break through it and continue to rise, geopolitical volatility and policy uncertainty would need to rise again. We expect that to happen by the end of the year or in 2026, but at this point we do not see a sustained price increase."
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silver:Semi-precious and semi-industrial
When asked about Bank of America's outlook for the silver market, which is lagging behind gold due to weak industrial demand, Branch said, "We expect silver to reach $40 an ounce. We think silver is one of the best investments right now because it's a combination of precious and industrial metals. Precious metals have been the main drivers of price growth recently, while industrial metals have been in the shadows, but that will change."
Branch added, "Obviously, tariffs mean a worsening trade environment. Trade was strong from the fourth quarter of last year to the first quarter of this year, as investors were buying silver in anticipation of the tariffs. But now that the tariffs have been implemented, we are entering a period of slowdown that could last one to two quarters, but industrial activity will recover."
Main drivers of silver prices
Blanche noted that silver is influenced by several factors, saying: "When analyzing silver price trends, there are two main factors: the gold price and the state of industrial activity, since silver is a precious metal. Currently, industrial activity is sluggish, which is why silver is lagging behind the significant increase in gold prices. This sluggish industrial activity is the main cause of the decline in silver prices."
Blanche said about the relationship between silver and clean technology: "Silver is closely related to solar panels, and we still see huge investments in this sector and in the transition to a comprehensive power system. I am sure silver will play a vital role. It will play a very important role because silver is the best conductor of electricity in the world. Once industrial activity stabilizes, silver will regain its luster again."
Gold and silver market trends at the time of reporting
Gold prices have been under downward pressure near $3,300 per ounce in recent days, and spot gold prices have risen 0.33% on the daily chart to trade at $3,311.
Silver prices fell on Wednesday, but there were fluctuations in both directions. Spot silver was last traded at $33.21 per ounce, down 0.1% from the previous day.
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