Global financial markets witnessed a dramatic shift on Wednesday, with gold and silver prices soaring to unprecedented levels in trading history, driven by US economic data that boosted risk appetite and reshaped expectations for monetary policy in the coming period.
Record-breaking and historic figures for the yellow metal
In a significant surge reflecting the growing demand for safe-haven assets, spot gold prices jumped 1% to $4,633.40 per ounce by 5:25 GMT. The momentum didn't stop there, with the precious metal hitting a session high of $4,639.42. Simultaneously, US gold futures (February delivery) climbed 0.8% to settle at $4,640.90, confirming the continued strong buying pressure.
Silver enters a new price era
The most notable event in today's trading was the exceptional performance of silver, which surpassed the $90 per ounce mark for the first time in history. The price jumped 4.2% to $90.59, achieving year-to-date gains of nearly 27%. This meteoric rise reflects not only silver's appeal as a store of value but also the increasing industrial demand for it, particularly in the clean energy and electronics sectors, making this psychological barrier a major turning point for the precious metal.
The impact of inflation and monetary policy
The main driver of these price increases was the release of weaker-than-expected US inflation data. This data played a crucial role in bolstering investors' bets on an imminent interest rate cut by the Federal Reserve. It is a well-established economic principle that lower interest rates reduce the opportunity cost of holding non-yielding assets like gold and silver, and they also typically put downward pressure on the dollar, making dollar-denominated metals less expensive for holders of other currencies.
The political landscape and Trump's statements
On the political front, US President Donald Trump seized the opportunity to comment on the economic situation, welcoming the low inflation figures. He reiterated his call for Federal Reserve Chairman Jerome Powell to take bold steps to "significantly" cut interest rates. This political pressure, coupled with the economic data, is increasing market anticipation of the central bank's upcoming decisions.
Performance of other metals and future prospects
The gains weren't limited to gold and silver; the rally extended to other metals as well. Platinum rose 4% to $2,415.95, and palladium climbed 3.3% to $1,899.44. Amid ongoing global geopolitical uncertainty, investors now anticipate two 25-basis-point interest rate cuts by the Federal Reserve this year, with the first likely in June, leaving the door open for further gains in the precious metals market.
