Gold prices rose more than 1.5%, surpassing the old peak of $4,381/ounce set in October. Traders are betting that the US Federal Reserve (Fed) will cut interest rates twice in 2026, after a series of economic data released last week.
Rising geopolitical tensions in recent weeks have also strengthened the safe haven role of gold and silver. The US tightens the blockade on Venezuela's oil. Meanwhile, Ukraine attacked for the first time an oil tanker belonging to the Russian shadow fleet in the Mediterranean.
Both gold and silver are heading for their strongest yearly gains since 1979. Gold prices have risen about 2/3 this year as central banks have increased purchases and cash flow into gold-backed ETFs.
In addition, President Donald Trump's strong moves to reshape global trade, along with his statements about the Fed, have added momentum to gold prices at the beginning of the year.
Todays rally was largely due to investors early positioning in expectations of a Fed rate cut, and was amplified by thin liquidity by the end of the year, said Dilin Wu, a strategist at Pepperstone Group Ltd. on December 22.
Along with gold, the prices of other precious metals also increased sharply. Silver prices have sometimes risen to 3.4%, hitting a record of nearly $70/ounce. Palladium surged 5%. platinum increased for the 8th consecutive session and the first time surpassing the 2,000 USD/ounce mark since 2008.
Gold prices have quickly recovered after the correction from the peak in October and are now expected to maintain a positive trend into next year. Goldman Sachs is one of the banks that forecast gold prices to continue to rise in 2026, with a base scenario of $4,900/ounce and an upside risk.
The recent increase in silver prices is supported by speculative cash flow and prolonged supply disruptions at major trading centers. The volume of silver futures transactions in Shanghai has skyrocketed this month, approaching the level recorded during the stress period a few months ago.
platinum has increased by about 125% since the beginning of the year, accelerating in recent days when the London market showed signs of tightening supply. Banks are bringing more metals to the US to prevent tariff risks, while exports to China remain strong as demand increases and contracts begin to trade on the Guangzhou Commodity Exchange.
As of 1:49 p.m. on December 22, Singapore time, spot gold prices increased by 1.5% to $4,404.12/ounce. Silver increased 2.5% to 68.85 USD/ounce. platinum increased by 4% and palladium increased by 4.4%.
According to Mr. Nicholas Frappell - global director of organizational market segment at ABC Refinery, Sydney, Australia, the main factors dominating the current market are the prospect of continued interest rate cuts and geopolitical concerns, especially related to Ukraine and the recent national security strategy of the US. In addition, Japan-China tensions and the situation in Venezuela are also supporting gold prices.
