Commodity wrap: silver leads commodity rally with record highs as gold, oil climb

Gold and crude oil rose on Thursday even as silver prices outshined all non-agricultural commodities with its impressive rally so far this month. 

Silver prices have risen 12% in the past four sessions, and have hit record highs.

The rally has outperformed gold, which has risen 5% since last week. 

Meanwhile, oil prices were 1% higher on Thursday as traders were optimistic after the US government shutdown ended. 

Base metals on the London Metal Exchange were mixed, but experts believed that the general tone of the market was optimistic. 

Silver

Silver prices have been on a merry run since the start of November, with prices hitting a record high of $54.395 per ounce on Thursday. 

Having recovered from a slump to $45.55 the previous week, the price dipped back below $47 per ounce in early November. Since then, it has overshadowed gold's performance, enjoying an uninterrupted upward trend.

“Its daily MACD has turned up sharply, suggesting that there’s strong upside momentum,” said David Morrison, senior market analyst at Trade Nation. 

Meanwhile, the gold-to-silver ratio has experienced a significant shift, dropping by 36% over seven consecutive months. 

This decline follows a five-year peak above 107 in April, a level that had previously indicated silver was historically undervalued relative to gold.

This week alone, the ratio has plummeted over 5% to 78.60, and experts see more downside in the coming months. 

Gold hits 3-week high

Gold prices climbed on Thursday, reaching a three-week high. 

This increase was driven by expectations that the reopening of the US government would lead to higher debt levels. 

Additionally, the forthcoming release of delayed US economic data is anticipated to offer greater insight into the Federal Reserve's interest rate policy.

US President Donald Trump signed legislation on Wednesday to end the longest government shutdown in history, which had lasted 43 days and resulted in the delay of critical economic data like inflation and jobs reports.

Although the agreement secures federal operations until January 30, the government's current trajectory is projected to increase its $38 trillion debt by an additional $1.8 trillion each year.

Last month, Fed Chair Jerome Powell announced a quarter-point interest rate cut.

However, he also advised against further easing this year, citing a need for more data.

Economists have urged the US Labor Department to prioritise the release of November employment and inflation data. 

This is to guarantee that Federal Reserve officials possess the most current information ahead of their December policy meeting.

Since last week, gold has rallied around 8% and is on course for its eighth consecutive positive session.

Morrison said:

“Gold is currently bumping up against a slight area of resistance, previously support back in October, around $4,220-$4,240,” he added.

At the time of writing, the COMEX gold contract was at $4,217.21 per ounce, up 0.1%. 

Oil rises

Oil prices rose on Thursday after having experienced steep losses in the previous session.

The looming US sanctions against Russian oil giant Lukoil raised concerns over the loss of supply, which boosted prices. 

As part of a strategy to push the Kremlin toward peace negotiations regarding Ukraine, the US has imposed sanctions on Lukoil. 

These sanctions forbid all transactions involving the Russian company after November 21.

Meanwhile, OPEC has maintained its global oil demand growth forecasts at 1.3 million barrels per day (bpd) for the current year and 1.4 million bpd for 2026, as stated in its latest monthly oil market report released on Wednesday.

However, the organisation has adjusted its outlook for the global oil market balance. 

It now anticipates a slight supply surplus in 2026, in contrast to its previous expectation of a more balanced market. 

This shift is due to anticipated production increases from the OPEC+ alliance and higher supply from non-OPEC+ producers.

Supply from producers outside the wider OPEC+ alliance is projected to increase by 920,000 bpd this year and 630,000 bpd in 2026, primarily driven by higher output from the US, Canada, Brazil, and Argentina.

In October, OPEC's supply only rose by 33,000 bpd month-on-month, bringing the total to 28.5 million bpd, according to the release.

However, this was 450k bpd less than the initial increase plan set by production quotas.

At the time of writing, the price of West Texas Intermediate crude oil was at $58.96 per barrel, up 0.8%, while Brent was 0.9% higher at $63.26 per barrel.