Gold and silver are trading near record highs. Wall Street thinks there’s more to come. | Central…

Explore the latest developments concerning Gold and silver.

Gold and silver are trading near record highs. Wall Street thinks there's more to come.

As equity and bond markets looked increasingly skittish in the face of domestic and geopolitical economic tensions this year, precious metals revived their status as a flight-to-safety trade.

The spot price of gold (GC=F) bullion crossed $4,000 per troy ounce for the first time in early October. Spot silver (SI=F) crossed the $50 per troy ounce mark for the first time in decades.

On Wednesday, spot gold was trading north of $4,220 per ounce, hitting another record, while silver was changing hands above $53 per ounce, according to Trading Economics data. Futures were trading slightly higher on gold and slightly lower on silver.

This Gold Rush Is Ominous

The king of precious metals is having a good run right now. That might be a problem.

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When prices are high and global conflicts destabilize the world, some investors start looking backwards—away from an uncertain future and toward the predictability of the past. And what’s older and more dependable than gold?

Last week, amid widespread geopolitical turmoil and a weakening U.S. dollar, the price of gold hit a historic high of $4,000 an ounce. This year has so far been gold’s best since 1979, a moment of instability so profound that it led to recession. Gold prices are much closer to a genuine “recession indicator” than, say, the resurgence of frozen yogurt or an uptick in Uber Eats orders. That’s because, over the past 50 years, spikes in the price of gold have typically been correlated with widespread inflation and geopolitical dysfunction. In 1979, amid double-digit inflation numbers in the United States and a global energy crisis, investors stocked up on the precious metal as a way to counter those shocks. In the years following the 2008 financial crisis, as investors lost trust in major institutions once seen as “too big to fail,” gold prices shot up again. And when persistent inflation was crushing the U.S. dollar after the coronavirus pandemic in 2020, gold once again soared.

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