Precious Metals Surge to Record Highs Fueled by Global Uncertainty

Precious metals experienced a significant surge on Friday, with silver reaching $75 for the first time ever, and gold and platinum both hitting record highs. This rally was driven by a combination of factors including speculative investment, anticipation of further US interest rate cuts, and escalating geopolitical tensions around the globe.

As of 0818 GMT, spot gold had risen 0.8% to $4,515.73 per ounce, having previously peaked at $4,530.60. US gold futures for February delivery also climbed, increasing by 0.9% to $4,545.10. Silver demonstrated an even more substantial gain, jumping 3.8% to $74.68 per ounce after briefly touching an all-time high of $75.14.

According to Kelvin Wong, senior market analyst at OANDA, the recent gains in gold and silver, beginning in early December, are largely attributable to momentum-driven and speculative trading. This has been amplified by low trading volumes typical of the year-end, expectations of prolonged US rate cuts, a weakening US dollar, and increased geopolitical instability.

Looking forward, Wong predicts further gains, suggesting gold could reach $5,000 per ounce and silver around $90 per ounce in the first half of 2026. This optimistic outlook is supported by the strong performance of gold throughout the year, which saw its largest annual increase since 1979.

Several factors contributed to gold’s impressive yearly performance, including easing of Federal Reserve policy, geopolitical uncertainty, robust demand from central banks, increased holdings in Exchange Traded Funds (ETFs), and a global trend towards de-dollarisation. However, record prices have begun to dampen retail buying in India, leading to increased discounts, while China has seen its discounts narrow from recent peaks.

Silver has significantly outperformed gold this year, soaring 158% compared to gold’s nearly 72% gain. This is due to structural deficits in the silver market, its designation as a US critical mineral, and strong demand from industrial sectors. The expectation of two US rate cuts in the coming year is also expected to continue supporting non-yielding assets like gold.

Geopolitical events are also playing a role, with the US enforcing restrictions on Venezuelan oil and conducting strikes against Islamic State militants in Nigeria following attacks on Christian communities. These events contribute to the overall risk environment that favors safe-haven assets like precious metals.

Platinum and palladium also experienced substantial gains. Spot platinum rose 5.8% to $2,349.65 per ounce, reaching an all-time high of $2,448.25, while palladium climbed 7% to $1,801.25, following a three-year high in the previous session. All precious metals are poised for weekly gains.

The surge in platinum and palladium, both crucial components in automotive catalytic converters, is driven by tight supply, concerns about tariffs, and a shift in investment from gold. Platinum has risen roughly 160% and palladium over 90% year-to-date. Jigar Trivedi, senior research analyst at Reliance Securities, notes that strong industrial demand and stockists covering positions due to sanctions-related concerns are supporting platinum prices.