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Long-Term Metal Bulls Awaiting? ETFs In Focus

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Gold reached a record high on Monday, surpassing $2,450 per ounce, while silver approached its highest levels in 12 years, hovering above $32 per ounce. This ongoing rally in the metals market has been fueled by various factors (read: Metal & Mining ETFs at a 52-Week High: Here's Why).

Behind the Headline

Gold's surge in recent months is attributed to expectations of a Federal Reserve rate cut, along with robust demand from central banks and Asian buyers. Despite briefly paring gains, gold has maintained its upward momentum, with a significant 18% rise this year.

Silver has outpaced gold, experiencing a 35% increase this year. Its industrial applications, such as in solar panel cells, have contributed to its demand, reaching a new high in 2023 for the third successive year. However, this dual utility makes silver's price vulnerable to economic fluctuations, similar to copper.

Copper prices also soared to new highs, driven partly by a suspected short squeeze. Analysts, including Michael Widmer from Bank of America, anticipate continued strong demand fundamentals for copper, as quoted on Yahoo. Widmer's team forecasts a 20% upside in copper prices by 2025, projecting an average of $12,000 per ton.

Long-term Bull Case for Commodities

Despite potential short-term fluctuations, experts like Bloomberg Intelligence's Mike McGlone express optimism about commodities, particularly metals, amid current macroeconomic backdrop, as quoted on Yahoo Finance. The potential Fed rate cuts by the end of 2024, coupled with the huge demand for AI and supply crunch should further propel metals from here.

McGlone highlights the special potential for silver and copper to maintain their favorable positions within the commodities market. This is especially true given silver has just entered the overbought territory. Also, precious metal silver is a relatively better value play than gold when it comes to the safe-haven investing.

Notably, metal and mining ETFs like Physical Silver ETF (SIVR - Free Report) , iShares Global Silver Miners Fund (SLVP - Free Report) , Global X Gold Explorers ETF (GOEX - Free Report) , Global X Copper Miners ETF (COPX - Free Report) , and Global X Uranium ETF (URA - Free Report) have been hovering around a one-year high.


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