Key Points
- Gold reached a record $4,500 per ounce, and silver broke past $70. Tensions in Venezuela and hopes of U.S. rate cuts are driving the price surge.
- Gold and silver are seeing their best annual performance since 1979.
- Platinum hit an all-time high of $2,300 due to major supply shortages.
- Investors are using precious metals to protect against a weaker U.S. dollar.
Gold prices just crossed a major milestone, hitting more than $4,500 an ounce for the first time. It is not just gold, though. Silver and platinum also smashed records this week as investors rushed to buy assets they consider “safe havens.” This massive rally stems from a few key factors: rising tensions in Venezuela, a weakening dollar, and expectations that the Federal Reserve will lower interest rates again soon.
The situation in Venezuela is a huge driver for the market. President Trump has ordered a blockade on oil tankers, which has investors worried about a wider international conflict. When the world feels unstable, people tend to sell their stocks and buy gold. So far this year, gold has climbed about 70%, while silver has shot up nearly 150%. This is the best year for these metals since 1979.
Trump’s aggressive trade moves and public comments about the Federal Reserve are also fueling the fire. Many people worry that the government’s massive debt will eventually make the U.S. dollar less valuable.
To protect their savings, investors are moving money into exchange-traded funds (ETFs) that hold physical gold and silver. In fact, holdings in the biggest gold ETF have grown by more than 20% this year.
Silver reached a record high on Tuesday, trading above $70 an ounce. This metal is moving even faster than gold because there is a physical shortage, and traders are hoarding it in New York to avoid potential future tariffs.
Platinum also joined the party, jumping to over $2,300 an ounce. It has not seen this kind of price action since the 1980s. Platinum is in short supply due to mining constraints in South Africa, the world’s largest producer.
While prices look favorable for sellers, some experts warn that the market might be overheating. A common trading indicator suggests that both gold and silver are currently “overbought,” which could lead to a price drop soon. Still, major banks like Goldman Sachs expect the trend to continue, with some predicting gold could reach $4,900 next year.
