Precious metals markets witnessed a historic surge on Friday, with gold, silver, and platinum all scaling unprecedented peaks. The rally was powered by a potent mix of aggressive speculative trading, growing anticipation of deeper interest rate cuts in the United States, and escalating geopolitical uncertainties that drove investors towards safe-haven assets.
Unprecedented Levels for Precious Metals
The day's standout performer was silver, which breached the $75-per-ounce barrier for the very first time. Spot silver prices jumped 3.6% to settle at $74.56 an ounce, after hitting a record-shattering high of $75.1515. Gold, the traditional safe haven, was not far behind. Spot gold rose 0.6% to $4,504.79 an ounce, after touching its own all-time high of $4,530.60 earlier in the trading session. This performance cements gold's strongest annual gain since 1979.
The rally extended to the platinum group metals as well. Platinum skyrocketed by 7.8% to $2,393.40 an ounce, following a record peak of $2,429.98. Palladium climbed 5.2% to $1,771.14, building on gains after reaching a three-year high in the previous session. According to Reuters, all major precious metals are poised to close the week with significant gains.
What's Driving the Meteoric Rise?
Several interconnected factors are fueling this remarkable bull run across the precious metals complex. Kelvin Wong, a senior market analyst at OANDA, explained to Reuters that momentum-driven and speculative players have been the primary force since early December. This activity is amplified by thin year-end liquidity, expectations of prolonged US rate cuts, a softer US dollar, and a flare-up in geopolitical risks.
For gold specifically, the rally is underpinned by Federal Reserve policy easing, geopolitical uncertainty, robust central bank buying, rising ETF holdings, and continued de-dollarisation trends. Silver's surge of 158% this year, far outpacing gold's 72% gain, is additionally supported by structural supply deficits, its recent designation as a US critical mineral, and vigorous industrial demand.
Platinum and palladium, both crucial for automotive catalytic converters, have rallied sharply due to tight supply conditions, uncertainty around tariffs, and a noticeable rotation of investment demand from gold into these metals. Platinum is up an astonishing 165% this year, while palladium has gained over 90% year-to-date.
Outlook: The Road to $5,000 Gold?
The bullish sentiment appears firmly entrenched. Analysts like Kelvin Wong project further upside, suggesting that gold could aim for the $5,000 level in the first half of 2026, while silver has the potential to reach around $90 per ounce.
With traders currently pricing in two US interest rate cuts for the next year, non-yielding assets like gold are expected to remain strongly supported in a lower interest-rate environment. Geopolitical tensions, including US actions regarding Venezuelan oil and strikes in Nigeria, continue to add a risk premium, keeping market jitters elevated and supporting demand for precious metals as a store of value.
