Precious metals markets witnessed a dramatic turnaround today, with gold prices rebounding strongly after a sharp profit-taking sell-off in previous sessions. This surge puts the yellow metal back on track to end the year with its best annual performance since 1979, fueled by renewed geopolitical risks and economic uncertainty gripping global markets.
Gold prices today and recovery from the decline
In the latest spot trading, gold rose 0.8% to $4,365.86 an ounce, recouping a significant portion of Monday's losses, which were the largest percentage drop since October 21. Prices had retreated from their all-time high of $4,549.71 reached last Friday. U.S. gold futures also climbed 0.8% to $4,380.10 an ounce.
Why is 1979 the benchmark?
The comparison with 1979 is particularly significant in the context of financial markets. In that era, the world experienced a massive wave of inflation and geopolitical turmoil (including the Iranian Revolution and the second oil crisis), propelling gold to unprecedented heights as a safe haven. Today, with similar conditions in terms of global tensions and economic anxieties, gold is once again playing its traditional role as a buffer against inflation and currency volatility, justifying this exceptional performance, unseen for over four decades.
Silver excels and enters the list of critical metals
Gold wasn't the only winner; silver also stole the show with a stunning performance, rising 4.6% in spot trading to $75.523 an ounce. Despite falling from its all-time high of $83.62, silver has still recorded a remarkable 161% year-to-date gain, outperforming gold.
This significant advantage of silver is due to its recent inclusion on the list of "critical metals" in the United States, in addition to a shortage of global supply coinciding with rising industrial demand, especially in the clean energy and electronics sectors, as well as investment demand.
Platinum and palladium performance and the Federal Reserve's anticipation
In other metals, platinum rose 4.5% to $2,203.07 an ounce, after retreating from a record high of $2,478.50. Palladium also gained 2%, reaching $1,648.75 an ounce, after a sharp 16% drop in the previous session.
Investors are now focused on the minutes of the Federal Reserve's December meeting, with markets betting on two interest rate cuts next year. Lower interest rates are known to reduce the opportunity cost of holding gold, which does not generate interest, thus enhancing its investment appeal in the coming period.
