Gold prices skyrocketed to a new all-time peak on Tuesday, with silver hovering close to historic highs, as investors sought safety amid escalating geopolitical tensions and growing bets on interest rate cuts in the United States.
Record Rally in Precious Metals
The spot price of gold climbed 0.5% to reach $4,467.66 per ounce by 0041 GMT, after touching an intraday record of $4,469.52 earlier in the session. In the futures market, US gold contracts for February delivery advanced 0.74% to $4,502.30 an ounce. This surge has pushed gold's year-to-date gain to an impressive 70%, with the metal crossing the $4,400 level for the first time just a day earlier.
Silver, often called 'poor man's gold,' continued its spectacular run, edging 0.19% higher to $69.15 an ounce. This follows its climb to an all-time high of $69.44 on Monday. Silver has dramatically outpaced gold this year, boasting a staggering 140% increase and coming within touching distance of the psychologically important $70 mark.
Geopolitical Tensions and Monetary Policy Drive Demand
The immediate trigger for the safe-haven rush is linked to rising tensions involving Venezuela. The United States has intensified efforts to seize tankers carrying Venezuelan oil, actions that inject fresh uncertainty into global markets. According to US authorities, the US Coast Guard this month seized a sanctioned supertanker and attempted to intercept two more Venezuela-linked vessels over the weekend.
Beyond geopolitics, market sentiment is being powerfully shaped by expectations of easier monetary policy. Traders are firmly pricing in two interest rate cuts by the US Federal Reserve next year. Comments from Fed Governor Christopher Waller, a potential successor to Chair Jerome Powell, reinforced this view last week when he stated the central bank still has room to lower rates. Non-yielding assets like gold become more attractive when interest rates fall.
Adding further bullish momentum, the US dollar weakened to near one-week lows against a basket of major currencies. A softer dollar makes dollar-priced bullion cheaper for overseas buyers, boosting international demand.
Broader Metals Market and Outlook
The rally extended across the precious metals complex. Spot platinum jumped 1.1% to $2,143.70 an ounce, hitting a 17-and-a-half-year high. Palladium also rose, gaining 1.42% to $1,784.30 an ounce, which is close to a three-year peak.
Analysts point to a potent cocktail of factors sustaining the metals boom: geopolitical and trade tensions, sustained buying by central banks worldwide, and the anticipation of a shift in the US interest rate cycle. For Indian investors and consumers, these global benchmarks directly influence local prices, affecting everything from jewellery purchases to investment flows. The current environment suggests continued volatility and potential for further gains as markets digest political risks and central bank signals.
