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Gold reaches historic high above $4,400 an ounce
Gold prices soared to an unprecedented peak on Monday, surpassing $4,400 per ounce for the first time as investors flocked to the safe-haven asset amid expectations of U.S. interest rate cuts and escalating global tensions.
Drivers behind the record rally
Analysts attribute the surge to mounting speculation that the U.S. Federal Reserve will reduce borrowing costs further in 2026. Lower interest rates typically diminish the appeal of bonds, prompting investors to seek alternative assets like gold. The metal has climbed over 68% this year, marking its strongest annual performance since 1979, according to Adrian Ash, director of research at BullionVault.
Geopolitical instability, including trade disputes and regional conflicts, has also fueled demand. Ash noted that policies under President Trump-such as tariffs and criticism of the Federal Reserve-have intensified market uncertainty, further boosting gold's appeal.
"The precious metals market suggests Trump's actions have triggered a seismic shift. Trade wars, attacks on the Fed, and geopolitical provocations have all contributed to gold's extraordinary rise this year," Ash said.
Central banks and inflation concerns
Global central banks have ramped up gold purchases to diversify reserves and reduce dependence on the U.S. dollar, a trend Goldman Sachs expects to persist into 2026. Anita Wright, a chartered financial planner at Ribble Wealth Management, added that gold serves as a hedge against inflation and economic volatility.
"When faith in financial assets or policy stability wavers, gold often reacts first as the ultimate monetary metal," Wright said.
A weaker U.S. dollar has also made gold more affordable for international buyers, amplifying demand.
Silver and platinum follow suit
Other precious metals mirrored gold's gains. Silver hit a record $69.44 per ounce on Monday, up 138% year-to-date, while platinum reached a 17-year high. Unlike gold, these metals benefit from industrial demand, compounding their price increases amid supply constraints.
Oil prices edge up amid Venezuela sanctions
Separately, oil prices rose after the U.S. imposed a blockade on sanctioned Venezuelan oil tankers last week. Brent crude climbed $1.31 to $61.78 a barrel, while U.S. crude rose $1.25 to $57.77. Despite the recent uptick, both benchmarks are poised to close 2025 below their year-start levels.
