Gold, silver and platinum jumped to all-time highs to extend an historic end-of-year rally for precious metals, with support from escalating geopolitical tensions, US dollar weakness and thin market liquidity, reports Bloomberg.
Spot gold rose as much as 1.2pc to a peak above $4,530 an ounce yesterday. Spot silver for immediate delivery advanced for a fifth session, climbing as much as 5pc to cross $75 an ounce.
“Intensifying geopolitical tensions continued to underpin demand for safe-haven assets” including gold and silver, said Daniel Takieddine, chief executive officer at Sky Links Capital Group. Year-end thin market liquidity also amplifies price swings, according to Takieddine.
The Bloomberg Dollar Spot Index, a key gauge of the US currency’s strength, was down 0.7pc for the week, its biggest drop since June. A weaker dollar is generally supportive of gold and silver.
Gold has gained around 70pc this year and silver more than 150pc, with both metals on track for their best annual performances since 1979. The scorching rally has been supported by elevated central-bank purchases, inflows to exchange-traded funds and three successive interest-rate cuts by the US Federal Reserve. Lower borrowing costs are a tailwind for precious metals, which don’t pay interest, and traders are betting on more rate cuts in 2026.
US President Donald Trump’s aggressive moves to remake global trade, along with threats to the Federal Reserve’s independence, added momentum to the rally earlier this year. Investor demand has also been underpinned by the so-called debasement trade, as concerns over swelling debt loads drive a retreat from sovereign bonds and the currencies they are issued in.
Gold’s resilience was demonstrated by its quick recovery after retreating from a previous peak of $4,381 in October, when the rally was seen as overheated. Heavy ETF buying has been a major driver of the latest surge, with holdings in State Street Corp.’s SPDR Gold Trust – the biggest precious-metals ETF – rising by more than a fifth this year.
Silver’s rally has been even more spectacular than gold’s. Its recent advance has been buoyed by speculative inflows and lingering supply dislocations across major trading hubs following a historic short squeeze in October.
Vaults in London have drawn sizable inflows since the October squeeze, though much of the world’s readily available silver remains in New York as traders await the outcome of a US Commerce Department probe into whether imports of critical minerals pose a national security risk. The review could pave the way for tariffs or other trade curbs on the metal.
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