Gold and Silver Rally, Markets Wary—Safety Assets Are the Favorite
Gold surged to a new record on Wednesday, followed by silver, which also followed suit, as geopolitical and economic uncertainty drove investors into safe havens. Additional support came from expectations of a Fed interest rate cut, making the precious metal even more sought-after.
On the spot market, gold rose 0.9% to $4,628.68 per ounce at 1:38 p.m. ET, after hitting an intraday record of $4,641.40. Meanwhile, U.S. gold futures for February delivery closed up 0.8% at $4,635.70.
"All roads lead to gold and silver," said Alex Ebkarian, COO of Allegiance Gold, noting that demand is coming from a variety of buyers and the market is in a structurally bullish phase. Gold—which offers no yield—typically performs strongly when interest rates are low and uncertainty is high.
From a geopolitical perspective, tensions are also heating up. Iran warned neighboring countries hosting US troops that they could attack American bases if Washington intervened in the protests in Iran. Meanwhile, Danish and Greenlandic ministers are scheduled to meet with US Vice President JD Vance after President Donald Trump reiterated his demand for US control of Greenland.
Data-wise, US retail sales in November were stronger than expected, while the PPI matched monthly expectations but was higher year-on-year, following a weaker-than-expected December core CPI on Tuesday. This combination keeps the market tilted toward expecting two interest rate cuts this year.
The Fed's independence issue also continues to fuel sentiment. Several global central bankers expressed support for Fed Chairman Jerome Powell after the Trump administration threatened him with criminal indictment—making the market even more sensitive to the risk of "politics getting into monetary policy."
Spot silver surged 5.2% to $91.46 per ounce, after earlier hitting a record $92.23. Ebkarian expects volatility to remain, but he believes silver heading towards $100 is not significantly different from the $90 level, with a short-term projection of $100–$144. In other metals, spot platinum rose 2.4% to $2,379.68, while palladium strengthened 1.3% to $1,862.96. (yds)
Source: Newsmaker.id
