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- What’s behind the surge in gold and silver prices? (cbsnews.com)
Gold and Silver Shine Bright as Prices Hit Record Highs Amid Global Tensions
Gold prices have shattered previous records, surging past $4,400 on Monday to reach an unprecedented all-time high. Analysts are attributing this dazzling climb to a mix of escalating geopolitical tensions and a more relaxed monetary policy.
The gleaming precious metal was trading at a stunning $4,475 per ounce by 4 p.m. EDT, after briefly touching an even loftier $4,477 earlier in the day.
This remarkable ascent marks an increase of over 70% since the beginning of the year. Gold traditionally serves as a safe-haven investment, offering a buffer against inflation.
“The metals trade has been strong all year, and particularly for gold,” noted Bret Kenwell, a U.S. investment and options analyst at eToro. “As its fundamentals remain intact, gold digested its recent rally to all-time highs quite well.”
Silver wasn’t to be outshone, with its prices also rocketing on Monday, hitting $69 by 4 p.m. EDT. This represents an astonishing 130% gain since the year commenced.
Both gold and silver are on track to achieve all-time closing highs today, according to market observers. This rally coincides with expectations for a robust finish in the stock market, largely propelled by strong tech sector gains.
What’s Fueling Gold’s Golden Surge?
Investors are flocking to gold, driven by a complex interplay of global factors, analysts report.
Bond yields globally have seen an uptick, while major international currencies like the yen have softened, explained Alex Kuptsikevich, chief market analyst at FxPro. This combination is re-igniting interest in the “debasement trade” – a strategy where investors move away from fiat currencies and towards tangible assets like gold.
Kuptsikevich further highlighted other geopolitical risks contributing to Monday’s investor pivot towards gold, including the U.S. blockade of Venezuelan oil supplies and Ukraine’s recent strike on a Russian shadow fleet tanker in the Mediterranean.
Softer monetary policy is also playing a significant role in this year’s gold upswing. Investor confidence has been bolstered by three consecutive rate cuts from the Federal Reserve. Many on Wall Street anticipate the central bank will continue to ease monetary policy in 2026, and President Trump is expected to name a new central bank chief before Fed Chair Jerome Powell’s term concludes in May.
“The latest leg of the rally has been driven by the market pricing in an increasingly gold-friendly 2026 outlook, with lower rates and a potentially softer dollar acting as tailwinds for the bullion,” stated Trevor Yates, senior investment analyst at Global X ETFs.
Adding to the demand, central banks across various nations are increasing their gold reserves, Yates added, further pushing up the asset’s price.
The World Gold Council reports a recent rise in demand for the precious metal from monetary authorities, such as the National Bank of Poland. While central bank gold purchases through October totaled 254 tonnes, a slower pace than the previous three years, Yates emphasized that these holdings remain well below their historical averages.
What Does the Future Hold for Gold in 2026?
Despite the current investor enthusiasm, the gold rally might not maintain its scorching pace into 2026, according to Capital Economics. The investment advisory firm predicted in a Monday research note that gold prices could dip to $3,500 by the end of next year, a decline that would also drag down silver prices.
“So goes gold, so goes silver: the end of the speculative boom in the former will also kill off the rally in the latter,” Capital Economics cautioned.
However, not all analysts share this cautious outlook. Yates maintains a more optimistic perspective, expecting lower interest rates and a potentially weaker U.S. dollar to continue bolstering the appeal of hard assets like silver next year.
“Overall, we continue to believe we are in the early innings of a broader precious metals rally and remain constructive on both gold and silver,” he concluded.
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