Silver surpassed $90 per ounce for the first time, and gold also increased as disappointing US inflation figures bolstered the argument for possible rate cuts later this year, amidst ongoing geopolitical tensions.
The white metal rose by as much as 3.6%, reaching $90.0394 an ounce on Wednesday, while gold remained about $15 shy of its all-time high.
The underlying US inflation in December proved less severe than anticipated, though economists suggested that the data was artificially low due to the unprecedented government shutdown that lasted into late last year.
Precious metals have built upon last year's gains, as the possibility of a criminal charge against Federal Reserve Chair Jerome Powell has rekindled concerns regarding the central bank's independence.
Central bankers worldwide have shown their support for Powell, and JPMorgan Chase & Co. CEO Jamie Dimon warned that political interference might have adverse effects.
Demand for safe-haven assets has also been boosted by US President Donald Trump’s capture of Venezuela’s leader, his renewed threats to claim Greenland, and the violent protests in Iran that might lead to the fall of the Islamic regime.
Analysts at Citigroup Inc. increased their projections this week for gold and silver to $5,000 per ounce and $100 an ounce, respectively, over the next three months.
Interest in gold and silver as a safeguard against inflation or economic uncertainties is expected to persist this year, although the increases may not be as significant as in 2025, according to David Chao, a global market strategist at Invesco Asset Management. “Gold is anticipated to perform better than silver this year, primarily due to recent geopolitical tensions.”
Last year, silver outperformed gold, experiencing an almost 150% increase driven by a short squeeze in October and ongoing supply constraints in London.
Traders are currently awaiting the results of the US Section 232 investigation, which may result in tariffs on silver. Concerns regarding the potential tax have resulted in metal being held up in US warehouses, tightening global stock levels.
Spot gold increased by 0.7% to $4,620.06 per ounce as of 11:09 a.m. in Singapore. Silver surged by 3.3% to $89.8065, and both platinum and palladium also saw gains. The Bloomberg Dollar Spot Index remained unchanged after a 0.2% increase on Tuesday.
