Gold and Silver Soar to New Peaks Amid Global Conflicts and Dollar Dip
Record-breaking gold and silver prices mark strong year-end rally. Geopolitical risks and a softening dollar push investors toward safe-haven assets.
image for illustrative purpose
On Friday, gold and silver touched the heights never experienced before as investors looked for refuge in the midst of accelerating geopolitical tensions and a weaker U.S. dollar, thus prolonging a vigorous year-end rally in the precious metals market.
The price of spot gold increased by 0.6% and reached $4,506.76 per ounce at 21:55 ET (02:55 GMT), after touching the peak of $4,530.60/oz during the day. The U.S. gold futures that are due to be delivered in February increased by 0.7%, thereby attaining the price of $4,537.55. Gold is at the peak of getting a rise in price of almost 3% this week due to the uncertainty that is driving the demand for safe-haven assets.
Silver's price movements were like that of gold and its price increased by over 4% to the new highest at $75.14/oz marking more than 7% rise in the weekly pricing. Silver's investment power was not only by political caution but also by the demand for the metal in the electronics and renewable energy industries.
The market became more uneasy as soon as the U.S. put pressure on Venezuela's oil exports, which caused regional instability and concerns about supply disruptions. At the same time, President Donald Trump's declaration of U.S. military strikes on the Islamist militant targets in Nigeria signaled lesser global conflict, which made investors go for the safer option of gold and silver.
There was a combination of deals in gold and silver during the regular holiday trading due to rare presence of sellers and huge demand for investment.
A major factor causing the dollar to lose ground against leading currencies was the expectation of Fed's easing policy in 2026 due to a declining economy and inflation which are both at low levels. A weaker dollar normally leads to higher demand for commodities priced in dollars as they become cheaper for foreign buyers.
Moreover, lower U.S. Treasury yields opened the door for investment in non-interest-bearing assets like gold as investors were shifting their portfolios in response to the changing U.S. interest rate outlook.
Analysts say price changes may be significant during the holiday period when there is little liquidity in the market. Nevertheless, the basic situations indicate that gold and silver will be strong until 2026.
It is anticipated that metals of the precious category will still be good quality to the stock market as a means against uncertainty, being supported by the above mentioned and implied risks of geopolitical nature, and the currency's ups and downs. Investors are monitoring with great interest the situation in Venezuela and Nigeria and the near future Fed policy making, which might again have a large impact on the demand and supply side of precious metals market.
