Precious metals prices continued their historic rally, with gold surging to unprecedented record highs on Wednesday, while silver broke the $90 per ounce barrier for the first time ever. This strong surge is driven by a complex mix of geopolitical and economic factors, most notably escalating tensions in Iran and growing concerns in global markets about the independence of the US Federal Reserve, prompting investors to seek safe havens.
New record highs for precious metals
According to trading data, spot gold rose 1.1% to a record high of $4,636.78 per ounce by 12:10 GMT. This surge coincided with a 1% increase in US gold futures (February delivery) to $4,643.90. Gold wasn't the only beneficiary; silver also saw significant gains, rising 4.8% to $91.11 per ounce , after earlier touching an all-time high of $91.53.
The upward trend also included other metals, with platinum rising 3.4% to $2,403.26 and palladium climbing slightly by 0.1% to $1,841.80 an ounce.
Drivers of the rise: between geopolitics and monetary policy
Analysts attribute this frenzied rise to several key factors that combine to create an ideal environment for precious metals:
- Concerns about the independence of the Federal Reserve: Concerns about the independence of the Federal Reserve are a crucial factor; when markets feel that the central bank may be subject to political pressures that affect its interest rate decisions, confidence in the paper currency (the dollar) is shaken, pushing capital towards gold as a store of value that is not affected by direct government decisions.
- Geopolitical tensions: Escalating tensions surrounding the Iranian issue have increased the risk premium in the markets. Historically, crises in the Middle East have been a key driver of gold and oil prices, as investors seek to hedge against any potential military escalation that could harm the global economy.
- Interest rate and inflation expectations: Data showing a decline in US inflation has reinforced expectations of an imminent interest rate cut. It is a well-established economic principle that there is an inverse relationship between interest rates and gold; lower interest rates reduce the opportunity cost of holding the non-yielding precious metal, making it more attractive than bonds.
Future predictions: Will we see gold at $5000?
Given these factors, future projections indicate continued upward momentum. ANZ Bank predicts that the price of gold will break the $5,000 per ounce in the second half of 2026. Many major financial brokerage firms share this optimistic outlook for the metals, believing that the prevailing uncertainty in the global economy will remain the primary driver of this historic rally in the commodities and metals markets.
