Rise! Rise! Rise! Geopolitical risks coupled with a weak dollar, precious metals surge at the end of the year, with gold, silver, and platinum all hitting new historical highs.

Driven by escalating geopolitical tensions, a weakening US dollar, and low market liquidity at the end of the year, precious metals have seen a historic rally at the end of the year. On Friday, the prices of gold, silver, and platinum all hit record highs, continuing their rare strong upward trend this year. Spot gold rose by 1.6% at one point, surpassing $1,540 per ounce; spot silver continued to rise for the fifth consecutive trading day, surging more than 10% and breaking through the $79 per ounce mark. Platinum also performed well, with prices breaking through $2,400 per ounce for the first time, reaching a new high since data has been collected since 1987. Analysts point out that the demand for safe-haven assets is a key driver of the current rally. Recently, the US has impounded Venezuelan oil tankers, increased pressure on the Venezuelan government, and cooperated with the Nigerian government to launch military strikes against ISIS, intensifying global geopolitical uncertainties. Daniel Takieddine, CEO of Sky Links Capital Group, stated that the ongoing geopolitical tensions have strengthened the attractiveness of safe-haven assets like gold and silver, while low year-end liquidity has further amplified price volatility. At the same time, the weakening US dollar has provided important support for precious metals. The US dollar spot index fell by 0.7% this week, marking the largest weekly decline since June. Since gold and silver are priced in dollars, a depreciation of the dollar usually increases their relative attractiveness. In terms of annual performance, precious metals have had an "epic rally" this year. Gold has risen by approximately 70% year-to-date, while silver has surged by over 150%, both potentially achieving their best annual performances since 1979. Factors driving the rally include continued buying by central banks, inflows of funds into exchange-traded funds (ETFs), and the Federal Reserve's three consecutive rate cuts this year. The lower interest rate environment weakens the opportunity cost of holding non-yielding assets, and the market is betting on further rate cuts by 2026. Furthermore, President Trump's earlier tough stance on reshaping the global trade landscape and comments regarding the independence of the Federal Reserve have also fueled the rally in precious metals. As government debt levels expand and the attractiveness of sovereign bonds and their issued currencies decreases, investors are turning to "currency debasement trades," further supporting gold demand. ETF fund flows are also crucial. The world's largest precious metal ETF, the SPDR Gold Trust managed by State Street Corp., has seen its gold holdings grow by over 20% this year, becoming a key driver for the new highs in gold prices. The rise in silver prices has been even more intense. After experiencing a historic "short squeeze" in October, supply mismatches at major trading centers have not been fully resolved, and speculative funds continue to flow in, driving silver prices higher. While London vaults have seen significant inflows of silver since October, global inventories of silver available for rapid delivery remain highly concentrated in New York. Traders are closely watching the US Department of Commerce's investigation into whether imports of key minerals constitute a national security risk, which could pave the way for tariffs or trade restrictions. Manav Modi, commodity analyst at Motilal Oswal Financial Services, pointed out that a large amount of "paper trading" in the market requires physical silver for hedging, but the current available supply is limited. This mismatch between supply and demand is the core reason for the price surge. As for platinum, it has surged by over 40% this month. In addition to strong physical demand, platinum used in the automotive and jewelry industries is expected to experience a global supply deficit for the third consecutive year, mainly due to interruptions in supply from South Africa, the largest producer of platinum.