Geopolitical risks and expectations of interest rate cuts support demand, precious metals continue their upward trend on the first trading day of the new year.

On the first trading day of the new year, precious metals continued to strengthen on the basis of a significant increase in 2025. The market generally believes that the geopolitical tensions combined with expectations of a rate cut in the United States are continuing to drive up demand for gold and other precious metals. As of the close on Friday, spot gold rose by 0.33% to $4,332.88. On December 26 last year, the price of gold hit a historical high of $4,549.95 per ounce, representing a 64% increase for the entire year of 2025. Bart Melek, Global Head of Commodity Strategy at TD Securities, stated that the market is still discussing the possibility of a rate cut starting in March, as well as the possibility of further rate cuts throughout the year. Tariff risks and market uncertainties caused by US debt issues are also driving up the prices of gold, silver, platinum, and palladium. In a low interest rate environment, gold, which does not generate interest income, is more attractive to investors. The market currently expects the Federal Reserve to implement at least two 25-basis-point rate cuts. As a traditional safe haven asset, gold is also supported by ongoing tensions in the Middle East and the unresolved Russia-Ukraine conflict. The unsettled situations in Iran and Gaza are keeping market risk aversion high. Jim Wyckoff, Senior Analyst at Kitco Metals, pointed out that from a technical perspective, the next target for long positions in February gold futures is above the key resistance level of $4,584. In the physical market, spot gold prices in India and China are showing a premium for the first time in two months, indicating a slight recovery in end demand. Other precious metals have performed even better. Spot silver rose by 1.66% to $72.8 per ounce, having hit a historical high of $83.62 on Monday; platinum surged by 3.5% to $2,125.80, also hitting a record of $2,478.50 during trading. In 2025, both silver and platinum outperformed gold, with silver rising by over 147% for the year, benefiting from its status as a critical mineral in the United States, supply tightness, and resonance between industrial and investment demand; platinum rose by 127% last year. Palladium also continued its strength, rising by nearly 2% to $1,636.43 per ounce. Palladium has accumulated a 76% increase for the year, marking its largest annual gain in 15 years. Analysts believe that in the context of ongoing global geopolitical risks and a shift towards loose monetary policy in the United States, the safe haven and investment value of precious metals will remain strong in the short term.