Gold breaks through $4450, silver approaches the $70 mark! Under the "dual drive" of interest rate cuts and geopolitical conflicts, the epic rise of precious metals continues.

With the escalation of geopolitical tensions and bets on further interest rate cuts by the Federal Reserve, the prices of gold and silver have surged to historic highs, adding momentum to the strongest annual performance in over 40 years. Gold prices rose by 2.4%, surpassing the previous record of $4,381 per ounce set in October; silver prices surged by 3.4%, approaching the $70 per ounce mark. This continued the hot streak, firmly propelling these metals towards their strongest annual performance since 1979. The latest upward momentum comes from traders betting on the Federal Reserve cutting interest rates twice in 2026, as well as President Donald Trump advocating for looser monetary policies. Lower interest rates typically benefit non-interest-bearing precious metals. The escalating geopolitical tensions have also enhanced the safe-haven appeal of gold and silver. The United States has intensified its oil blockade against Venezuela, increased pressure on President Nicolas Maduro's government, and Ukraine launched its first attack on a Russian "shadow fleet" tanker in the Mediterranean. Dilin Wu, strategist at Pepperstone Group Ltd, stated: "Today's rally is mainly driven by early positioning around expectations for a Fed rate cut, amplified by year-end illiquidity." She pointed out that weak November job growth and lower-than-expected U.S. inflation data supported expectations for further rate cuts. Gold prices have surged by 67% so far this year, benefiting from increased central bank purchases and funds flowing into gold-backed exchange-traded funds (ETFs). Trump's radical reshaping of global trade and his threats to the independence of the U.S. central bank also fueled the earlier rally. Investors have played a crucial role in the rise of gold, partly due to concerns over currency devaluation trades. Data shows that gold-backed ETFs have seen continuous inflows for the past four weeks, with total holdings in these funds increasing every month this year except for May. Other precious metals have also surged significantly, with palladium rising by 7.1% to its highest level in nearly three years. Platinum has risen for an eighth consecutive trading day, surpassing the $2,000 per ounce mark for the first time since 2008. Gold quickly rebounded from its peak in October (when the rally was seen as overly crowded and overheated) and is now poised to carry these gains into next year. Goldman Sachs is among several banks forecasting continued price increases in 2026, with a base case target of $4,900 per ounce and upside risk. The bank noted that ETF investors are beginning to compete with central banks for limited physical supply. Wu from Pepperstone stated that central bank purchases, physical demand, and geopolitical hedging are "medium- to long-term anchoring factors," while Federal Reserve policies and real rates continue to drive cyclical volatility. She noted that new entrants in the gold market, such as stablecoin issuers like Tether Holdings SA and some corporate treasury departments, are creating a "broader capital base," which "adds to demand resilience." The recent rise in silver has been supported by speculative fund inflows and ongoing supply imbalances in major trading centers following a historic short squeeze in October. Earlier this month, total trading volume for Shanghai silver futures surged to levels seen during a tense period several months ago. Platinum has accelerated its rise recently due to tightening in the London market and has risen by about 124% this year. Banks in the U.S. are storing more metal to hedge tariff risks, while exports to China have remained strong with increased demand and the start of trading contracts on the Guangzhou Futures Exchange. At the time of writing, spot gold was up 0.26% at $4,456 per ounce. Silver was up 0.16% at $69.18 per ounce. The Bloomberg Dollar Spot Index fell by 0.03%. Nicholas Frappell, global institutional market director at Sydney's ABC Refinery, stated that the main factors influencing the market are the prospect of further rate cuts and "geopolitical concerns, particularly surrounding Ukraine and recent national security strategies of the Trump administration." He added that tensions between Japan and China, as well as the situation in Venezuela, also support gold.