MARKET REPORT: Silver rises while gold hits another record high

Precious metals prices surged higher yesterday as investors flocked to ‘safe’ places to store their money amid uncertainty over the US election and tensions in the Middle East.

Gold hit a record high of $2,740 an ounce and silver surpassed $34 an ounce for the first time since 2012. Gold is up more than 30 percent this year, while silver is up 43 percent.

Shares in FTSE 100 gold and silver mine Fresnillo rose 6.3 per cent, or 44.5p, to 747.5p – making it the biggest gainer – while Hochschild rose 1.3 per cent, or 3p, to 238p and Centamin rose by 2.1 percent. or 3.6p, to 171.5p.

The rise in precious metals prices has been driven by expectations of further interest rate cuts by central banks around the world, as well as concerns about the US election outcome and conflicts in the Middle East.

The US Federal Reserve and Bank of England are widely expected to cut interest rates again early next month, while the European Central Bank did so last week.

The People’s Bank of China also took action, cutting interest rates yesterday in a bid to revive the world’s second-largest economy.

Lower interest rates tend to increase the price of gold as it becomes relatively more attractive to investors. Bullion is also seen as a ‘safe’ asset in uncertain times.

With two weeks to go until election day, the US elections appear to be on a razor’s edge, while investors are also nervous about developments in the Middle East.

“The outlook for gold is quite bullish,” said Joni Teves, a strategist at UBS, who is tipping gold to reach $3,000 next year.

He added: “There are many risks in the coming weeks, with the US elections just around the corner. There could be some choppy price action.”

Oil prices fell back to $75 a barrel, sending BP up 1.3 percent, or 5.25p, to 404.85p and Shell up 0.6 percent, or 14.5p, to 2551p.

But the broader market struggled to provide direction, with the FTSE 100 index down 0.5 percent, or 40.01 points, to 8318.24 and the FTSE 250 losing 1.2 percent, or 242.98 points, to 20906.6.

Drug giant Astrazeneca got a shot in the arm when EU regulators approved its treatment for Wainzua nerve damage.

Shares fell 0.1 percent, or 16p, to 11930p. Transport giant First Group gained 0.6 percent (0.8 cents) to 140.1 cents after buying London coach firm Anderson Travel for an undisclosed sum.

The deal will see First Group add around 40 coaches operating in central London and Heathrow Airport to its First Bus business.

Anderson Travel made underlying profits of around £1m on revenues of £7.3m in the year to June 2023.

Housebuilder Barratt Redrow fell 1.4 per cent, or 6.7p, to 481.4p after an upgrade from analysts at Morgan Stanley.

Magazine publisher Future, whose titles include Country Life, Homes & Gardens, Decanter, FourFourTwo and Marie Claire, rose 7.2 percent, or 57.5 cents, to 852 cents, after crashing 19 percent on Friday following the announcement of the departure of CEO Jon Steinberg.