Gold has gained around 70% this year while silver has more than doubled, both are on track for their best annual performance since 1979. — Bloomberg
WASHINGTON: Gold rose to a record above US$4,500 an ounce on escalating tensions in Venezuela and expectations for more US rate cuts. Silver and platinum also advanced to all-time peaks.
Spot gold climbed as much as 0.8%, building on three days of gains. Frictions in Venezuela, where the United States has blockaded oil tankers, have added to the metal’s haven appeal.
Traders are also betting the Federal Reserve (Fed) will follow three straight interest rate cuts by lowering the cost of borrowing again next year, which would be a tailwind for non-yielding precious metals.
Gold has gained around 70% this year while silver has more than doubled, both are on track for their best annual performance since 1979.
The rally in precious metals has been underpinned by elevated central bank purchases and inflows into exchange-traded funds (ETFs).
Total holdings in gold-backed ETFs have risen every month this year except May, according to World Gold Council data.
Heavy ETF buying has been a major driver of the latest surge. Holdings in State Street Corp’s SPDR Gold Trust, the biggest precious-metals ETF, have risen by more than a fifth this year.
US President Donald Trump’s aggressive moves to reshape global trade, as well as his threats to the Fed’s independence, added fuel to the bull run earlier this year.
Investors have also been spurred in part by the so-called debasement trade, a retreat from sovereign bonds and the currencies they are denominated in over fears their value will erode over time due to ballooning debt levels.
Underscoring this demand for precious metals, gold bounced back quickly after a retreat from its previous peak of US$4,381 an ounce in October, when the rally was seen as overheated.
It is now positioned to carry these gains into next year.
Goldman Sachs Group Inc is among several banks to predict prices will keep rising in 2026, issuing a base-case scenario of US$4,900 an ounce with risks to the upside.
Silver, which traded above US$70 an ounce for the first time on Tuesday, advanced a further 0.7% to set a record of US$71.9175.
The white metal’s rally has been even more spectacular than gold’s, with its most recent advance buoyed by speculative inflows and lingering supply dislocations across major trading hubs following a historic short squeeze in October.
London’s vaults have seen significant inflows since then, but much of the world’s available silver remains in New York as traders await the outcome of a US Commerce Department probe on whether critical minerals imports threaten national security, which could lead to tariffs or trade restrictions on the metal.
Platinum also soared to an all-time high yesterday, jumping 4% to trade above US$2,300 an ounce for the first time.
Buoyed by tight supplies and historically elevated borrowing costs, the metal – used in the automotive and jewelry sectors – rose for a 10th straight session, its longest winning streak since 2017.
It has advanced 160% this year, the biggest annual gain since Bloomberg began compiling data in 1987. — Bloomberg
