Gold Soars Above $4500 an Ounce for the First Time

SadaNews - The price of gold has risen to a record level, exceeding $4500 an ounce for the first time, amidst escalating tensions in Venezuela and expectations for another U.S. interest rate cut next year.

Spot gold prices climbed about 0.1%, continuing its gains for three consecutive days. Tensions in Venezuela, where the U.S. has imposed a blockade on oil tankers, have increased the appeal of the metal as a safe haven, as it heads towards its best annual performance since 1979.

Traders also expect the U.S. Federal Reserve, after three consecutive interest rate cuts, to lower borrowing costs again next year, which would support prices of precious metals that do not yield returns.

Gold has risen by more than 70% this year, while silver prices have surged by 150%; both are on track for their best annual performance since 1979.

This rise in precious metals prices has been supported by increased purchases from central banks and flows of money into exchange-traded funds. According to data from the World Gold Council, total holdings in gold-backed exchange-traded funds have risen monthly this year, except for May.

Trump's Policies Support Precious Metals Prices

The assertive actions of U.S. President Donald Trump to reshape global trade, along with his threats to the independence of the Federal Reserve, have bolstered the rally seen in markets earlier this year.

Investors have also been partly motivated by what's known as "currency devaluation trading," retreating from sovereign bonds and the currencies they are valued in, fearing their value may erode over time due to inflationary levels of debt.

John Finney, business development manager at "Guardian Vaults," a Sydney-based bullion trading company, stated, "The main drivers of gold and silver prices currently are a combination of ongoing physical demand and renewed sensitivity to macroeconomic risks."

He added, "We are witnessing momentum building rather than being curbed, indicating a firm conviction rather than mere random speculation."

This demand was evidenced by gold's rapid recovery after retreating from its previous peak of $4381 an ounce in October, when the surge was deemed excessive.

It is now in a position to continue these gains into next year. The Goldman Sachs Group is among several banks that anticipate continued price increases in 2026, projecting a base scenario of $4900 an ounce with potential upside risks.

Strong interest in purchasing exchange-traded funds (ETFs) has also been a key driver of the recent rise. Holdings in the "SPDR Gold Trust" from State Street, the largest exchange-traded fund for precious metals, have increased by more than a fifth this year.

Traders are also following developments in Venezuela, where Trump warned President Nicolas Maduro against challenging the United States and pledged to retain the oil sourced from a supertanker.

Silver Hits a Record Level

The price of silver, which surpassed $70 an ounce for the first time on Tuesday, rose by as much as 1.8% to record a high of $72.70. The rise of the white metal has been more dramatic than that of gold, supported by speculative flows and ongoing supply disruptions at major trading centers after a historic sell-off in October.

London vaults have seen large flows since then, but most of the globally available silver remains in New York, awaiting the results of an investigation by the U.S. Department of Commerce into whether imports of critical metals threaten national security, which could lead to tariffs or trade restrictions on the metal.

Finney stated, "Unlike previous surges in silver prices that were primarily driven by debt, this move is supported by real demand for the metal, altering market behavior around key price thresholds. I see no end to this trend for now."

Platinum Also at Record Levels

Platinum prices significantly rose on Wednesday, up 4%, exceeding the $2300 mark for the first time since Bloomberg began collecting data in 1987.

Due to supply shortages and rising borrowing costs to historical levels, the price of the metal used in the automotive and jewelry sectors has risen for the tenth consecutive session, marking its longest consecutive gains since 2017.

Platinum has gained 160% this year, marking the largest annual increase according to Bloomberg data. This recent rise comes amid signs of a tightening market in London, as banks deposit the metal in the United States, similar to silver, to hedge against tariff risks. Platinum is also heading towards a third annual deficit this year due to supply disruptions in South Africa, its main producer.

Spot gold prices rose 0.6% to $4511.91 an ounce by 10:20 AM Singapore time, after earlier reaching a record high of $4525.77.

Silver prices increased by 1% to $72.15. Platinum prices rose by 2.2% to $2340.52, while palladium prices rose by 1.3%. The Bloomberg Dollar Spot Index fell by 0.2%.