The gold price index rose 4%, and the silver price index rose 6%, amid falling yields in the U.S.
An index tracking the price of gold rose 4.13% on August 19 and closed at $4,512 per ounce. The silver index gained 6.39%, reaching $66.97 per ounce, according to The Rio Times.
According to the publication, the rise in precious metals was driven by a decline in yields on long-term U.S. government debt following the U.S. Treasury Department’s launch of a program to repurchase its own long-term debt. The decline in real yields reduces the opportunity cost of holding gold and silver, which do not generate interest income.
The rally was also fueled by the weakening of the U.S. dollar: dollar-denominated metals become more affordable for buyers using other currencies. At the same time, investors were awaiting the release of the minutes from the U.S. Federal Reserve’s meeting and were hoping for softer signals regarding monetary policy.
For more breaking news, follow the UA.News Telegram channel.
Rising metal prices could improve expectations for export revenues at major mining companies in Mexico and Peru. Mexico is the world’s largest producer of silver, while Peru has significant gold and silver production. The Rio Times notes that Peruvian producers sell metals for dollars, while part of their operating costs is denominated in Peruvian soles.
The publication lists signals from the Fed, the dollar exchange rate, and possible new U.S. government debt buybacks among the factors to watch.
