Gold and silver surged to record highs on Monday as investors intensified bets on 2026 interest-rate cuts, propelling the precious-metals market to historic levels after a year defined by monetary uncertainty and safe-haven demand.
Gold rose above US$4,400 per ounce for the first time, while silver climbed past US$69, extending a rally that has seen both metals post their strongest annual performances in decades. Analysts said the move reflected a blend of technical momentum, central-bank expectations, and renewed risk aversion as global growth indicators continued to soften.
“Precious metals are benefiting from a powerful combination of anticipated rate easing, safe-haven flows, and seasonal strength,” said Matt Simpson, senior market analyst at StoneX. “Liquidity will thin into year-end, but underlying demand remains broad-based.”
The latest advance followed a week of subdued U.S. data that strengthened the case for monetary easing. Traders now expect the Federal Reserve to deliver at least two rate cuts in 2026, with the European Central Bank and Bank of England projected to follow. Lower interest rates tend to support non-yielding assets such as gold and silver by reducing the opportunity cost of holding them.
In London trading, spot gold touched US$4,400.29, surpassing its previous record set in November. Silver gained more than three per cent to US$69.44, continuing an upward trajectory that has outpaced gold’s performance throughout 2025. Both metals have benefited from a weaker U.S. dollar, which has fallen to six-month lows against major currencies, further boosting international buying.
Demand from central banks has provided an additional tailwind. Data from the World Gold Council show that official-sector purchases have remained steady throughout the year, led by emerging-market institutions seeking to diversify reserves. Exchange-traded funds backed by physical bullion also recorded inflows in December after several months of outflows.
The rally has spilled over into equities, with global mining groups including Barrick Gold, Newmont, and Fresnillo all trading higher on Monday. Analysts at Capital Economics said sustained prices above current levels could materially improve cash flow for producers if volatility remains contained.
Market observers cautioned, however, that elevated prices could invite short-term corrections once investors reassess the pace of rate adjustments. “A lot of the optimism is already priced in,” said one metals strategist in London. “If early-2026 inflation readings surprise on the upside, it may test the resilience of this rally.”
For now, momentum remains with the bulls. Gold is up around 65 per cent this year, while silver has gained more than 130 per cent, extending what many describe as a generational shift in portfolio-hedging behaviour. With geopolitical tensions still simmering and inflationary pressures yet to fully recede, precious metals appear set to retain their defensive appeal into the new year.
You must be logged in to post a comment.