Gold, silver hit record highs on geopolitical tensions, Fed rate-cut bets

[BENGALURU] Gold and silver climbed to record highs on Friday (Dec 26), driven by safe-haven demand and increased bets of further US interest rate cuts next year, while precious metals platinum and palladium were on the upswing as well.

Spot gold rose 0.5 per cent to US$4,502.75 per ounce, as at 10.25 am, after hitting a record high at US$4,530.60 earlier in the session. US gold futures for February delivery climbed 0.7 per cent to a record high of US$4,533.60 per ounce.

Spot silver jumped 3.4 per cent to US$74.35 per ounce, before hitting an all-time high at US$75.14.

The US dollar hovered near the two-month lows it reached on Wednesday.

Bullion has staged a stellar rally in 2025, climbing 72 per cent so far and shattering multiple record highs.

Gold has been helped by a cocktail of factors, including US interest rate cuts and bets of further easing, geopolitical uncertainty, robust central bank demand as countries look to move away from US securities and the dollar, and rising holdings in exchange-traded funds.

Silver has gained 158 per cent year-to-date, far outpacing gold, and breaking through the US$75 mark, propelled by a structural deficit, its inclusion in a US critical minerals list, and strong industrial demand.

On the geopolitical front, the White House has ordered US military forces to focus almost exclusively on enforcing a “quarantine” of Venezuelan oil for at least the next two months, a US official told Reuters, indicating Washington is currently more interested in using economic rather than military means to pressure Caracas.

On the macroeconomic front, traders still expect two US rate cuts next year.

Non-yielding assets such as gold tend to do well in a low-interest-rate environment.

Spot platinum was up 5 per cent at US$2,334.35 per ounce, after rising to an all-time high of US$2,377.50 on Wednesday, while palladium rose 4.4 per cent to US$1,757.25 per ounce. REUTERS