Gold and silver surged to near-record levels on Tuesday, driven by growing expectations of easier U.S. monetary policy and ongoing geopolitical tensions. Gold climbed close to the $4,500-per-ounce mark, while silver hovered just below $70, extending a powerful year-end rally across precious metals.
Spot gold touched a high of $4,497.55, while silver reached a fresh record near $69.98. Both metals have posted substantial gains this year, defying the typical seasonal slowdown in trading activity.
Analysts at Mitsubishi noted that the late-year surge highlights a lack of profit-taking by investors, despite the holiday period when markets often see reduced activity.
Macro and geopolitical forces fuel gains
Precious metals have set multiple record highs this year, supported by U.S. interest rate cuts and a broadly weaker dollar. Analysts expect the momentum to continue into next year, with Goldman Sachs forecasting gold prices could reach $4,900 by December 2026.
The U.S. dollar has fallen nearly 10% in 2025, putting it on track for its worst annual performance in eight years. Many investors anticipate further weakness in 2026 as global growth improves and the Federal Reserve continues easing monetary policy.
According to Zain Vawda of MarketPulse by OANDA, rising expectations for rate cuts following recent U.S. inflation and labor data have significantly boosted demand for precious metals.
Safe-haven buying has also remained strong amid ongoing tensions in the Middle East, uncertainty surrounding a potential Russia–Ukraine peace agreement, and recent U.S. actions involving Venezuelan oil shipments.
ETF inflows and central bank demand remain strong
Analysts say central bank gold buying, which has stayed elevated for four consecutive years, is likely to remain a key support factor through 2026. Central banks are projected to purchase around 850 tons of gold in 2025, down from 1,089 tons in 2024 but still historically strong, according to consultancy Metals Focus.
Investment demand has also surged. Physically backed gold exchange-traded funds are on track for their largest annual inflows since 2020, with $82 billion — equivalent to 749 tons — added so far this year, data from the World Gold Council shows.
High prices have weighed on jewelry demand, particularly in India, where consumption fell 26% year on year to 291 tons between January and September. Metals Focus expects weakness to persist into 2026. However, retail investment in gold bars and coins in India rose 13% to 198 tons during the same period, reflecting bullish price expectations.
Silver outperforms gold
Silver has significantly outpaced gold this year, surging more than 140% compared with gold’s gain of over 70%. The rally has been fueled by strong investment demand, silver’s inclusion on the U.S. critical minerals list, and momentum-driven buying.
Silver exchange-traded product inflows have exceeded 4,000 tons, according to Standard Chartered analyst Suki Cooper.
Mitsubishi analysts cautioned that while momentum and fundamentals still favor further upside, stretched positioning and low liquidity toward year-end could increase volatility. They noted that traders are likely to buy dips as long as real yields remain low and physical supply stays tight.
Analysts also highlighted that silver now appears technically overbought. The gold-to-silver ratio has narrowed to around 64 ounces of silver per ounce of gold, down sharply from 105 ounces in April.
Rhona O’Connell of StoneX warned that once current market exuberance fades, silver and gold could decouple, with silver potentially underperforming.
