Metal prices surged, with gold reaching a new record and silver briefly hitting a 12-year high following central banks’ easing policies. Copper also experienced a price rally amid China’s additional stimulus measures. However, the price rise may not end here.

Metal prices surged, with gold reaching a new record high and silver briefly hitting a 12-year peak, driven by central bank easing policies. Copper also rallied, supported by additional stimulus measures from China. The rally in metal prices may not stop here as economic conditions continue to favor further growth.

Over the past two weeks, both precious and industrial metals have posted strong gains. Gold surged by 4%, with spot prices rising by €90 per ounce after the Federal Reserve’s (Fed) recent 0.5% rate cut. Silver followed suit, jumping 5% to €28.64 per ounce, briefly reaching $32.71, its highest level in 12 years.

China’s latest stimulus package also fueled industrial metals like copper, which climbed 6% to $10,080 (€9,024) per metric ton, the highest price in two months. Aluminum, zinc, and tin also saw price increases, supported by positive demand forecasts.

Metal prices, especially gold and silver, are closely tied to changes in the Fed’s monetary policy. Lower interest rates reduce the opportunity cost of holding precious metals, making them more attractive as safe-haven assets. Meanwhile, industrial metals like copper are more responsive to China’s growth prospects and infrastructure spending.

Gold and silver tend to thrive in low-interest-rate environments, where investors seek safe, stable stores of value. Mounting U.S. government debt and potential economic downturns are likely to push the Fed towards more rate cuts, with markets predicting a 50% chance of further reductions in November and December.

Silver, while benefiting from its role as a precious metal, is also vital to industrial sectors like renewable energy and electronics, driving its demand. Copper prices are also expected to continue rising long-term, as the global shift toward clean energy accelerates demand for industrial metals.

China’s easing measures, including a significant infrastructure investment program, have further boosted the demand outlook for silver and copper. The Silver Institute emphasized that silver’s role in electronics and other industrial applications makes it irreplaceable, supporting its long-term growth prospects. Similarly, S&P Global forecasts copper demand will double by 2035, driven by the energy transition in major economies.

Metal markets are poised for continued growth as central banks in the U.S. and China maintain supportive monetary policies, boosting demand for both precious and industrial metals.