Metal frenzy reaches climax! Silver breaks 100 for the first time, gold approaches $5000, marking the largest weekly gain of 2020.

Friday, the 23rd, saw a new wave of surges in the global metal market. Based on the closing prices of futures contracts, both gold and silver achieved their largest weekly gains in 2020, entering a streak of weekly gains that has been maintained since 2026. Both New York silver futures and London spot silver broke the $100 mark for the first time in history. Gold, for the fifth consecutive trading day, hit all-time highs in intra-day trading, approaching the $5000 mark. London copper rose above $13,000, nearing the intra-day record set earlier this month. Other precious and industrial metals also showed strong increases. In the US stock market, New York palladium futures rose by about 7%, platinum futures rose by over 7%, and London nickel and tin saw closing increases of over 4% and 9.5%, respectively. This surge was driven by multiple factors. A weak US dollar, massive outflows of funds from currencies and sovereign bonds by investors, President Trumps attacks on the Fed threatening central bank independence, deteriorating US-Europe relations, and geopolitical turmoil all exacerbated safe-haven sentiment, collectively pushing metals higher. Comments indicated that Trump's remarks about the US "fleet" heading to Iran prompted investors to rush into basic metals such as silver, gold, and copper. The fleet mentioned refers to a statement by President Trump on Thursday, the 22nd, aboard Air Force One, reported by Xinhua News Agency, saying that the US is deploying heavy forces to Iran, with many ships heading towards Iran. Institutions generally remain bullish on the future of precious metals. Last week, Wall Street reported that JPMorgan expects gold prices to reach $5000 by the fourth quarter of 2026, and potentially even $6000 in the long term. Citigroup raised its short-term price targets for gold to $5000 in a bullish market scenario and silver to $100, while UBS predicts that silver still has about 25% upside potential but warns of potential fluctuations later in the year. The current frenzy in the metal market reflects an acceleration of the global de-dollarization trend. Emerging market assets continued their strong performance, with investors pouring record amounts into EM funds. The iShares Core MSCI Emerging Markets ETF, with assets of $135 billion, attracted nearly $6 billion in January, potentially marking the largest monthly inflow since its inception in 2012. Industrial demand resonates with Chinese buying, with New York silver rising by over 10% for the second consecutive week. On Friday, the COMEX March silver futures on the New York Stock Exchange rose above $103.10/oz during the midday trading session, up by about 7%. Spot silver also rose, reaching above $102.87/oz, a nearly 6.9% increase, marking the second consecutive day of all-time highs in trading. Silver futures for immediate delivery have risen by over 14% this week, the largest weekly gain since July 2020, marking a second consecutive week of gains exceeding 10%, with a cumulative increase of over 40% from the beginning of the year. Silver outperformed gold in 2025, with an annual increase in silver prices of nearly 150% and gold prices rising by over 60%, the highest annual gain since 1979. This shift reflects some investors turning to silver after gold became too expensive. Silver also benefited from strong industrial demand, especially in the CECEP Solar Energy sector, and increased buying from Chinese retail investors, adding momentum to the upward movement of silver prices. Reports earlier mentioned that when silver broke through $80/oz in the last week of 2025, there were longer queues in front of the trading counters at the largest gold and jewelry trading hub in China - the Shuibei Market in Shenzhen. Analysts believe that $100 is a so-called "psychological price" for silver. Neil Welsh, Metal Director at Britannia Global Markets, stated in a report released on Friday: "Geopolitical upheaval and [Trump's] new attack on the Fed are driving safe-haven demand." Ole Hansen, Commodity Strategy Director at Saxo Bank, said: "Momentum has clearly become an important factor driving prices, with the breakdowntAke of historical highs and the 'fear of missing out' (FOMO) psychology playing a significant role. However, if this rally is attributed solely to speculation, that would be a big mistake." Activity in the Chinese market is crucial for silver prices. Hansen pointed out that physical silver demand in China remains strong, although rising prices may begin to hurt consumption in the long run. Local futures prices continue to trade at a premium of over $12/oz compared to London prices, indicating tight regional supply and strong demand. Hansen warned: "If prices accelerate too quickly, the risk of demand destruction cannot be ignored, and this dynamic could ultimately favor a rotation back to gold." Citigroup aggressively raised its short-term price targets in a report released last week. Max Layton and other Citigroup analysts raised the short-term gold target price for the next 0-3 months from $4200/oz to $5000/oz in a bullish market scenario. Citigroup pointed out that the ongoing decision on US tariffs under Section 232 could exacerbate the longstanding physical scarcity issues in gold in the short term. However, the bank's baseline scenario assumes a target price for gold of $70/oz over the next 6-12 months, demonstrating caution towards market volatility in the second half of the year. UBS's report last week predicted that silver prices still have about 25% upside potential from current levels, but prices are expected to gradually decline by the end of the year, showing a "two-stage" market trend. UBS strategist Joni Teves said that the core driver of this forecast adjustment is the surge in trading activity in the Chinese market. Since the second half of 2025, trading volume in Chinese silver futures has surged far beyond expectations, with increased investor participation amplifying the impact of market tension on spot prices. UBS specifically pointed out that while trading volume in Chinese silver futures far exceeds that in the New York Commodities Exchange, silver stockpiles at the Shanghai Futures Exchange amount to less than 10% of those at the NY Comex. Gold becomes a hedge against Trump uncertainty and rises nearly 15% year-to-date Gold hit an all-time high during midday trading on Friday, with New York gold futures rising above $4990, up nearly 1.6% for the day. Spot gold rose to $4989.80, marking a nearly 1.1% increase. Gold recorded its best weekly performance since March 2020, with a weekly gain of over 8% and an increase of nearly 15% year-to-date. Yuxuan Tang, Head of Macro Strategy at JPMorgan Private Bank in Asia, said: "As the rule-based order established after World War II shows signs of cracking, gold is undergoing a continuous reevaluation. Investors are increasingly viewing gold as a reliable hedge against these difficult-to-quantify systemic transformation risks." Chris Weston, Research Manager at Pepperstone, noted in a report that gold is becoming more of a hedge against Trump's "uncertainty". While many traders view gold as a hedge against US-Europe tariff war risks, he pointed out that even after the threats of tariffs eased, gold prices did not retreat. Global central banks, especially those from emerging markets, are almost daily looking for reasons to shift reserves from dollars to gold. He believes that spot gold and gold futures will "sooner rather than later" touch the $5000 mark, with the target now clearly visible and attracting buyers. Analysts at Saxo Bank stated: "This rally is driven by FOMO, while attention continues to focus on a broader range of drivers supporting hard assets after a slight easing of tension between the US and Europe. Central bank demand remains strong, the US dollar continues to weaken, various governments continue to issue debt, but with almost no clear indication of long-term repayment." Analysts at Deutsche Bank wrote in a report on Friday: "The search for a safe haven remains the most important driver. However, in the short term, the rally may pause as the Greenland dispute appears to have been temporarily resolved." Major Wall Street investment banks are generally bullish on the long-term outlook for gold. Morgan Stanley set a target price of $4800 for gold in the fourth quarter of 2026, a significant increase from the $4400 forecast set in October 2025. JPMorgan predicts that the price of gold will reach $5000 by the fourth quarter of 2026, potentially even aiming for $6000 in the long term. Natasha Kaneva, Global Head of Commodities Strategy at the bank, emphasized in a report on December 18: "The trend driving the revaluation of gold prices is far from being exhausted." She believes that amid ongoing trade uncertainty and geopolitical risks, the diversification needs of central banks and investors will continue to push gold prices higher. In a bullish market scenario, Citigroup raised its short-term gold target price from $4200/oz to $5000/oz for the next 0-3 months. UBS recently reiterated its outlook for gold, suggesting further upside potential in the first half of this year, with the base scenario showing an approximately 9% increase from current levels. The Polish central bank this week approved a plan to purchase an additional 150 tons of gold to cope with increasing geopolitical instability. Meanwhile, India's holdings of US treasury bonds have decreased to the lowest level in five years, with gold and other alternatives taking up a larger share, reflecting the shift of some major economies away from the world's largest bond market. Supply disruptions and a weak US dollar drive the rebound in London copper On Friday, the London Metal Exchange (LME) copper futures rose to over $13,180/ton, up 3.3% intraday, nearing the intra-day record set earlier this month, and closing up by about 2.8% at $13,115/ton, reversing the cumulative declines from the first four days of the week with a total weekly gain of over 2%. LME nickel futures rose by approximately 4.2%, reaching $18,756/ton, setting a new record high since June 2024, with a weekly gain of 6.7%. LME tin futures rose by about 9.5%, reaching $56,816/ton, surpassing the closing high set last Wednesday, with a weekly gain of 18.4%. The rise in copper prices can be attributed to a weak US dollar, ongoing supply disruptions, and easing trade frictions between Washington and Europe. The US dollar is expected to record its first weekly decline this year, reducing the cost for buyers holding other currencies to purchase commodities. Capstone Copper stated on Thursday that operations at the Chilean Mantoverde copper-gold mine have been largely halted due to a three-week labor strike. ANZ analysts said, "The workers have blocked access to the site, which produces about 106,000 tons annually. There are currently no plans to resume wage negotiations." The geopolitical turmoil and new attacks on the Fed by Trump are fueling safe-haven demand. While this typically benefits gold and silver, the effects have recently spilled into base metals as well. This has provided further momentum for the copper market, which has been rising since the middle of last year due to major mine disruptions, vibrant demand brought by electrification, and a surge in goods shipped to the US before possible tariffs were imposed. Although benchmark copper prices have risen, the price differentials between different contracts on the LME are still small, as goods delivered to US and Asian warehouses have relieved buyers' pressure due to the sharp price increase earlier in the week. On Friday, the spot copper price had a premium of $74.50/ton over the three-month copper futures contract, indicating an improvement in the supply situation. This is in stark contrast to Tuesday when the spot price was over $100 higher than the three-month futures contract, indicating a tight supply. Traders mentioned that the inflow of goods into Asian warehouses was partly driven by deliveries booked by Chinese smelters in profitable arbitrage trades. Chinese smelters have increased their exports to LME warehouses this year, partly due to the surge in the London copper benchmark price exceeding domestic prices, and the slowdown in the real estate sector affecting consumption. Traders expect more deliveries in the coming weeks, although the arbitrage window is currently closed. Morgan Stanley is optimistic about aluminum and copper, both facing supply constraints amidst rising demand. Analysts at ING pointed out that the prospect for base metals in 2026 remains constructive, supported by industrial demand from the CECEP Solar Energy sector and battery technology, as well as sustained investment inflows. This article is reprinted from Wall Street News, Edited by GMTEight, Li Junling.