BY COMFORT OGBONNA
Gold prices surged to a fresh all-time high on Monday as investors piled into safe-haven assets amid growing expectations that the United States will cut interest rates further, while silver extended its blistering rally to also reach a historic peak.
The strong momentum reflects a combination of easing monetary policy expectations, a softer U.S. dollar and persistent geopolitical and economic uncertainties that continue to buoy demand for precious metals.
Spot gold jumped 1.2% to a record $4,391.92 an ounce, marking another milestone in what has been an extraordinary year for the metal. Silver outperformed once again, climbing 2.7% by 0344 GMT to an unprecedented $69.23 an ounce, underscoring the strength of investor appetite across the precious metals complex.
Gold has now gained about 67% so far this year, smashing multiple records and breaking through the psychologically important $3,000 and $4,000 per-ounce levels for the first time. The metal is on track for its strongest annual performance since 1979, highlighting the scale of the rally. Silver’s advance has been even more dramatic, with prices soaring roughly 138% year-to-date, driven by a mix of strong investment inflows and ongoing supply constraints that have tightened the market.
Seasonal trends have also lent support. December has historically been a favorable month for both gold and silver, and that pattern has so far held true. However, some caution is emerging as the year draws to a close, with thinner trading volumes raising the risk of short-term profit-taking after such sharp gains.
Gold’s traditional role as a store of value has been reinforced by heightened geopolitical and trade tensions, continued buying from central banks, and expectations that interest rates will trend lower next year. A weaker U.S. dollar has added further support by making dollar-priced metals more attractive to overseas buyers.
Markets are currently factoring in two U.S. interest rate cuts next year, even as the Federal Reserve has signaled a cautious approach. Lower interest rates typically benefit non-yielding assets like gold, as they reduce the opportunity cost of holding them. Looking further ahead, expectations of a cooling U.S. labor market and a potential shift toward a more dovish Federal Reserve stance could provide additional upside for gold over the medium term.
The rally was not limited to gold and silver. Platinum surged 4.1% to $2,054.25 an ounce, its highest level in more than 17 years, while palladium rose 4% to $1,781.32, reaching a near three-year high. Together, the gains across precious metals highlight strong investor confidence in the sector as markets brace for slower growth, lower rates and continued global uncertainty.
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