Precious metals prices surged on Tuesday, setting new records for gold and silver in all currencies, while platinum reached all-time highs except against the rapidly declining US Dollar.
Analyst Rhona O’Connell from brokerage StoneX noted that gold’s rise is being supported by ongoing geopolitical tensions anticipated to last into late 2025. Market strategist Karl Schamotta from Corpay highlighted that the US Dollar remains overvalued from a fundamental perspective. Following these sentiments, traders are now betting on an end-of-2026 interest rate hovering around 3.00%, nearly 0.4 points below the US Federal Reserve’s latest predictions. As a result, the Dollar has fallen to its lowest level since early October against other major Western currencies.
Gold prices peaked just shy of $4,500 per ounce, while silver reached $70, marking a 2.8% increase for the week leading up to Christmas. Additionally, platinum prices soared past $2,180 per Troy ounce, achieving levels not seen since the record highs of 2008. This surge positioned platinum at unprecedented prices in Euro, Yuan, Japanese Yen, British Pounds, and nearly all other global currencies.
O’Connell pointed out that ongoing conflicts in the Middle East, stalled negotiations over Ukraine, and escalating tensions between the US and Venezuela are contributing to this situation. The ongoing movement away from the Dollar has made gold a crucial asset for many investors.
Recent analysis indicated that Chinese commercial banks now hold approximately 12,000 tonnes of gold—more than five times the official reserves reported by the central bank. In light of attempts to curtail speculation and remove retail investors from the Shanghai Gold Exchange, many major banks, notably ICBC, are closing margin accounts due to new taxation rules on gold trading. Consequently, as gold jewelry prices in China exceed 14,000 Yuan per gram, households are shifting their purchasing behavior from jewelry to gold coins, small bars, bullion-backed ETFs, and digital gold accounts.
As the global economy begins showing signs of improvement, this could further weaken the Dollar, according to Paresh Upadhyaya, head of fixed income and currency strategy at Amundi, Europe’s largest asset manager. The precious metals market is becoming increasingly important for investors as economic uncertainties persist, making it a pivotal time for gold and other metals.