Post by : Badri Ariffin

On Friday, gold, silver, and platinum surged to unprecedented heights, propelled by robust speculative interest, limited year-end trading, and increasing anticipation of U.S. interest rate cuts. The demand for precious metals rose further due to escalating geopolitical tensions and a weakening U.S. dollar, which collectively contributed to significant price increases.

During early Asian trading, spot gold rose by 0.6% to $4,504.79 per ounce, having briefly hit a new all-time high of $4,530.60. U.S. gold futures for February delivery saw a rise of 0.7% to $4,535.20, indicating a sustained investor interest in the safe-haven asset.

Silver experienced even more substantial gains, with spot silver jumping 3.6% to $74.56 per ounce, after peaking at $75.14 during the session. This metal has consistently surpassed gold in recent months, benefiting from tight supply conditions coupled with strong industrial demand.

Market analysts attribute the ongoing rally to momentum-driven and speculative buying, heightened by lower liquidity typical of year-end trading. Furthermore, expectations surrounding continued easing of monetary policy by the U.S. Federal Reserve have significantly influenced prices, as lower interest rates tend to favor non-yielding assets like precious metals.

“The momentum and speculative buyers have been the driving force behind the gold and silver rally since early December,” noted Kelvin Wong, a senior market analyst at OANDA. He highlighted that the mixture of low liquidity, prolonged expectations of U.S. rate cuts, a depreciating dollar, and escalating geopolitical risks have led prices to new record highs.

Looking ahead, Wong projected that gold might reach around $5,000 per ounce in the first half of 2026, while silver could approach $90 per ounce if current trends continue.

Exceptional Year for Precious Metals

This year has witnessed a remarkable ascent for gold, recording its most substantial annual gain since 1979. This surge is attributed to a blend of U.S. monetary policy easing, geopolitical instability, robust central bank purchasing, increased exchange-traded fund (ETF) holdings, and ongoing efforts by various nations to lessen their dependence on the U.S. dollar.

Silver has far outperformed gold this year, soaring 158% compared to gold’s near 72% increase. Analysts cite structural supply deficits, silver’s status as a crucial U.S. mineral, and strong demand from sectors such as solar energy and electronics as key drivers of silver's outstanding performance.

As markets anticipate at least two U.S. interest rate cuts in the upcoming year, analysts predict continued support for precious metals. Lower interest rates diminish the opportunity costs associated with holding gold and silver, making these assets more appealing in a low-yielding landscape.

Geopolitical Tensions Enhance Metal Demand

The allure of these metals has been bolstered by ongoing geopolitical challenges. The United States is intensifying efforts to enforce a temporary “quarantine” on Venezuelan oil, while recent military actions against Islamic State positions in northwest Nigeria emphasize pervasive global security threats. Such situations typically enhance demand for safe-haven assets, including gold.

Platinum and Palladium Gain Ground

Platinum exhibited the most significant daily gain among precious metals, increasing by 7.8% to $2,393.40 per ounce, after touching a historic peak of $2,429.98 earlier that day. Palladium also rose, climbing 5.2% to $1,771.14, following a three-year high in the preceding session. All major precious metals are on track for considerable weekly gains.

Both platinum and palladium, widely utilized in automotive catalytic converters, have surged due to tight supply conditions, tariff-related uncertainties, and shifts in investments from gold. Platinum is up about 165% year-to-date, while palladium has increased by over 90% during the same timeframe.

“Strong industrial demand is bolstering platinum prices,” remarked Jigar Trivedi, a senior research analyst at Reliance Securities in Mumbai. He mentioned that U.S. stockists are adjusting their holdings amid concerns related to sanctions, which has helped sustain high prices.

Positive Outlook for Precious Metals

With an accommodating monetary policy, limited supply, and ongoing geopolitical uncertainty, analysts foresee minimal downside for precious metals in the near future. As the year nears its end, investor attention remains sharply focused on gold, silver, and platinum—all of which continue to garner robust buying interest amid a dynamic global economic landscape.

#World News #Gold