Gold and Silver continue their rally as these metals jumped
to an all-time high on December 25 amid the geopolitical uncertainties and risks
in the global markets. According to Bloomberg, spot gold rose as much as 1.2%
to a record above $4,530 an ounce. Tensions in Venezuela, where the US has
blockaded oil tankers and intensified pressure on Nicolás Maduro’s government,
have further strengthened the precious metal’s safe-haven appeal. In Africa,
the US has also carried out a “powerful and deadly strike” against a terrorist
group in Nigeria, according to a social media post by President Donald Trump.
Silver prices jumped for the fifth day in a row, rising as much as 4.5% to
cross $75 an ounce for the first time, according to Bloomberg. The rally is
being driven by speculative buying and ongoing supply problems in key trading
centres after a historic short squeeze in October.
The Bloomberg Dollar Spot Index, which tracks the strength of the US dollar,
fell 0.8% this week, its biggest weekly drop since June. A weaker dollar
usually supports gold and silver prices.
Gold prices are up around 70% this year, while silver has
surged more than 150%, putting both metals on track for their best yearly gains
since 1979, Bloomberg data shows. The sharp rise has been supported by strong
central-bank buying, steady inflows into exchange-traded funds (ETFs), and
three US Federal Reserve interest-rate cuts this year. Lower interest rates
make non-interest-paying assets like gold and silver more attractive. Traders
are also betting on more rate cuts in 2026.
ETF demand has played a major role in the recent surge.
Holdings in gold-backed ETFs have increased in every month this year except
May, according to the World Gold Council. Assets held by SPDR Gold Trust, the
world’s largest precious-metals ETF, have risen by more than 20% so far this
year.
Silver’s rally has outpaced gold’s. While London vaults have
received large inflows since October, much of the world’s available silver
remains in New York. Traders are waiting for the outcome of a US Commerce
Department investigation into whether imports of critical minerals pose a
national security risk. The probe could result in tariffs or trade restrictions
on silver.
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