Last week I said gold needed a strong catalyst to force its way beyond all-time highs. It turns out geopolitics provided exactly that.
Gold surged to fresh record levels as fears of renewed hostilities between Iran and Israel combined with a growing US-Venezuela standoff. Safe haven demand kicked into gear quickly, pushing spot gold to $4,411 an ounce by 12:50 GMT after briefly touching $4,420, comfortably clearing the previous October peak.
Silver has joined the party too, ripping through Friday’s $67 level and trading around $69, another record move that highlights just how aggressive this rally has become.
US interest rates has added fuel to the fire. Markets are increasingly betting on lower rates next year, tighter supplies and stronger demand for physical assets.
Analysts have also pointed to the intensifying US blockade on Venezuelan oil as a factor lifting precious metals, with investors growing nervous as President Donald Trump weighs military options to increase pressure on Nicolas Maduro.
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This is now shaping up as the strongest year for precious metals since 1979. Gold is up 68% so far this year, while silver has soared 139%.
Political uncertainty, Trump’s sweeping reciprocal tariffs and repeated attacks on the Federal Reserve’s independence have all pushed investors towards hard assets this year.
For now though, momentum is firmly with the bulls. The Santa rally for metals appears to have arrived early, and at the moment, nothing seems keen on standing in its way.
Updates
15:45 GMT – Gold touches another new all time high, $4,431