Gold and silver surged to record highs this week, extending a powerful rally that has made precious metals among the best-performing assets of 2025 and placed them on track for their strongest annual gains since the late 1970s, as investors sought protection from geopolitical risk, a weakening dollar, and expectations of easier U.S. monetary policy.
Spot gold rose more than 0.7% on Tuesday to trade near $4,480 an ounce after touching an intraday high of $4,497.55, while U.S. gold futures briefly topped $4,530. Silver climbed above $70 an ounce for the first time, pushing its year-to-date gains past 140% and eclipsing its previous all-time highs.
The surge has been driven by a convergence of forces that have reshaped investor behavior. A softer dollar, falling real interest rates, and sustained global tensions have combined to elevate demand for hard assets traditionally viewed as stores of value during periods of uncertainty.
"Expectations for a dovish Fed, markets losing confidence in the greenback, geopolitical tensions, central bank buying.... Investors' lust of gold remains massive, due to a mix of all factors above," said Carlo Alberto De Casa, external analyst at banking group Swissquote.
Bullion prices have climbed more than 70% this year, buoyed by persistent central bank purchases and strong inflows into gold-backed exchange-traded funds. Analysts say those flows have been reinforced by expectations that U.S. monetary policy will loosen further as economic growth moderates and political pressure mounts on the Federal Reserve.
Markets are currently pricing in two interest rate cuts for 2026, amid reports that President Donald Trump may announce his choice for the next Federal Reserve chair earlier than expected. Lower rates typically reduce the opportunity cost of holding non-yielding assets such as gold and silver.
Silver's rally has been even more pronounced, reflecting not only its role as a monetary metal but also its expanding industrial use. Supply constraints, rising demand from clean energy and electronics manufacturing, and investment inflows have all tightened the market.
"Both gold and silver continue to attract buying strength. This behavior suggests that $4,500 and $70 are being treated less as hard ceilings and more as reference points within ongoing trends, leaving both metals firmly supported for now and over the holidays," said Ahmad Assiri, research strategist at Pepperstone.
