Gold and Silver Prices Rise as Fed Minutes and Geopolitical Risks Remain in Focus
Gold and silver prices moved higher on Wednesday as investors monitored geopolitical tensions and awaited the release of minutes from the Federal Reserve’s January meeting.
Spot gold gained 2.6% to $5,005.44 per ounce by 10:04 ET (15:04 GMT), recovering from Tuesday’s drop to $4,841.74. Gold futures for April delivery climbed 2.2% to $5,013.70.
Geopolitical Developments Influence Precious Metals
Markets remained focused on global political developments. The first round of U.S.-brokered peace talks between Ukraine and Russia in Geneva ended after roughly two hours. Ukrainian President Volodymyr Zelenskiy described the negotiations as “difficult” and accused Moscow of slowing progress.
At the same time, Iran confirmed it had agreed on “guiding principles” with the United States for renewed nuclear negotiations. However, officials indicated that a full agreement remains distant. Analysts noted that diplomatic progress could reduce demand for safe-haven assets such as gold and silver.
Gold, traditionally seen as a hedge against uncertainty, surged to a record high of $5,594.82 on January 29 amid strong speculative buying. As a non-yielding asset, gold tends to benefit from low interest rate environments. In recent months, gold ETF demand from China and broader Asian markets has played a significant role in supporting prices.
However, sentiment shifted after Kevin Warsh was nominated as the next Federal Reserve chair. Gold prices dropped sharply to $4,403.24 earlier this month before stabilizing.
Silver also rebounded strongly. Spot silver jumped nearly 6% to $77.97 per ounce, following a decline of more than 4% in the previous session.
Analyst Outlook: Silver Could Outperform Gold
Rick Kanda, Managing Director at The Gold Bullion Company, shared his outlook on gold and silver prices for the coming years.
Gold’s Exposure to ETF Demand
Kanda said gold remains vulnerable if ETF demand from Asia weakens. He noted that Asian investors often follow momentum trends. A price correction could trigger additional selling and amplify short-term downside risks.
Central Bank Buying Remains Strong
Despite potential volatility in ETF flows, central bank demand for gold remains solid. China’s central bank recently extended its gold buying streak to fifteen consecutive months. Unlike short-term investors, central banks typically focus on long-term reserve strategies and are less sensitive to price swings.
Silver Expected to Outperform
Looking ahead, Kanda expects silver to outperform gold over the next few years. While both metals could benefit from favorable economic conditions, silver may see stronger gains due to rising industrial demand alongside investment interest.
Year-End Price Targets
Kanda believes silver could surpass earlier forecasts of $80 per ounce. He referenced Bank of America projections ranging between $135 and $309, driven by a narrowing gold-to-silver ratio and growing industrial usage.
For gold, he expects prices could approach $6,000 per ounce by the end of 2026, provided central banks continue aggressive buying and geopolitical uncertainty persists.
