Gold prices soared to unprecedented levels, nearing $5,000 an ounce, driven by escalating geopolitical tensions and threats against the Federal Reserve’s independence. The precious metal reached a record high of over $4,967 on Friday, marking an impressive weekly increase of nearly 8%. This surge was further aided by a weaker US dollar, making gold more affordable for global buyers. Alongside gold’s ascent, silver reached an all-time high just shy of $100 an ounce, while platinum also set a new record. These movements contributed to a significant decline in a key measure of the US dollar, which appears to be facing its toughest week in seven months.
Market experts attribute this momentum to increasing concerns over the stability of international economic structures. Yuxuan Tang, head of macro strategy in Asia at J.P. Morgan Private Bank, noted, “Gold is undergoing a sustained re-rating as cracks appear in the post-World War II rules-based order.” Investors are shifting their perspectives, viewing gold as a reliable safeguard against unpredictable geopolitical risks.
Following its strongest annual performance in over four decades, gold has surged 15% since the beginning of the year. Contributing factors include President Donald Trump’s ongoing criticisms of the Federal Reserve, military actions in Venezuela, and threats concerning Greenland. These circumstances have triggered a phenomenon known as the “debasement trade,” wherein investors move away from sovereign bonds and currencies in favor of safer assets like gold.
Strategist Ahmad Assiri from Pepperstone Ltd Group remarked on the fragile nature of gold price ceilings, stating, “Gold supply is just not enough to diversify US market and political tension.”
Adding to market optimism, Goldman Sachs has revised its year-end gold price forecast from $4,900 to $5,400 an ounce, citing increased demand from both individual and institutional investors, including central banks. Notably, Poland’s central bank plans to buy an additional 150 tons of gold as a buffer against geopolitical uncertainty. Meanwhile, India has reduced its holdings of US Treasuries to a five-year low as part of a broader trend among several countries shifting away from the United States’ largest bond market.
Attention is now focused on Trump’s upcoming selection for the next Fed chair, with the president indicating he has concluded candidate interviews. A more dovish appointment could further encourage interest-rate cuts, benefiting non-yielding assets like gold following three consecutive reductions.
In the silver market, prices have more than tripled in the past year. The surge has been fueled by a historic short squeeze and a wave of retail buying, leaving financial institutions struggling to meet escalating demand. Confusion over new Chinese policy updates regarding export licenses has intensified perceptions of scarcity, leading to heightened market volatility, even amid the US’s decision not to impose blanket import tariffs on critical minerals.
The unpredictable nature of silver’s pricing is compelling banks to reassess their risk strategies, as highlighted by Robert Gottlieb, a former precious metals trader. He stated that banks are obliged to lessen their positions in the market, resulting in increased volatility and wider price spreads.
As of the latest figures, gold rose by 0.3% to $4,952.02 an ounce, with silver increasing by 2.6% to $98.70. Platinum marked an increase of 0.4% after reaching an earlier record of $2,690.08, while the price of palladium slid. The Bloomberg Dollar Spot Index remained stable, concluding the previous session down by 0.3%.
