Silver hits record high on rate-cut bets and geopolitical strife

The white metal advanced as much as 0.6% to $67.5519 an ounce.

Silver rose to a record and gold pushed higher on worsening geopolitical tensions and expectations for more Federal Reserve rate cuts next year.

The white metal advanced as much as 0.6% to $67.5519 an ounce. Silver has been buoyed by speculative inflows and lingering supply tightness after a historic short squeeze in October. The total trading volume for silver futures in Shanghai spiked earlier this month to levels near those seen during the crunch a couple of months ago.

Spot gold advanced to nearly $4,365 an ounce – within $20 of an all-time high – having risen for the last two weeks. Traders are betting the Fed will cut interest rates twice in 2026 after a slew of economic data last week did little to provide more clarity on the outlook, though US President Donald Trump has advocated for aggressively lowering rates. Looser monetary policy is a tailwind for gold and silver, which don’t pay interest.

Geopolitical tensions have also enhanced the haven appeal of precious metals. The US has intensified an oil blockade against Venezuela, stepping up pressure on the government of President Nicolás Maduro, while Ukraine attacked an oil tanker from Russia’s shadow fleet in the Mediterranean Sea for the first time.

Precious metals are capping a historic year, with gold and silver both heading for their strongest annual gains since 1979. Silver has more than doubled and gold has surged about two-thirds, underpinned by increased central-bank buying and inflows into bullion-backed exchange-traded funds.

Gold-backed ETFs have seen rising inflows for five straight weeks, according to data compiled by Bloomberg, and World Gold Council figures show total holdings in these funds have risen every month this year except May. Meanwhile, silver has been bolstered in recent weeks by surging demand, as well as tightness and dislocations across major trading hubs.

Gold is expected to rally further next year, Goldman Sachs Group Inc. analysts including Daan Struyven and Samantha Dart said in a note late last week, setting a base case scenario of $4,900 an ounce with risks to the upside. ETF investors, they said, are starting to compete with central banks for limited bullion.

Silver advanced 0.5% to $67.46 as of 8:27 a.m. in Singapore. Spot gold rose 0.5% to $4,363.21 an ounce, within sight of the record high above $4,381 in October. Platinum climbed, after jumping 2.5% on Friday, and palladium rose 1.5%. The Bloomberg Dollar Spot Index was little changed.