Why gold and silver prices are surging at breakneck speeds

Precious metals soared Monday - with gold extending its record-run past $US5100 an ounce and silver surging to new highs - as investors continued to load up on hard assets as a hedge against geopolitical tensions and economic uncertainty.

Gold was up 2.4 per cent on New York’s COMEX commodities exchange before pulling back; it had crossed the $US5000 threshold for the first time a day earlier. It rose 0.7 per cent to $US5042.52 as of 7.30am in Singapore on Tuesday.

Silver, which tends to be more volatile, spiked 14.6 per cent Monday to more than $US116 per ounce before paring back. The white metal has more than tripled in value in the past year.

Analysts say the run-up in both metals reflects a broader shift away from dollar-based assets, a phenomenon known as the “debasement trade”.

“This isn’t a meme rally … this is a fundamental rally in terms of the de-dollarisation of the world, as central banks are protecting themselves from US policy, and maybe the unpredictability of what the U.S. does,” said Bob Gottlieb, a former metals trader who worked for JPMorgan and other financial institutions.

Numerous central banks upped their gold purchases in 2022 at the onset of the war in Ukraine, and the buying accelerated in early 2025 as President Donald Trump’s trade wars disrupted global markets. Those anxieties have reignited in recent week as the Trump administration has assumed a more aggressive foreign policy stance, including the capture of Venezuelan leader Nicolás Maduro in a military operation, and threatening European leaders over US demands to annex Greenland. U.S. and global stocks sold off, then stabilised as geopolitical tensions cooled.

Over the weekend, Trump threatened Canada with a 100 per cent tariff, saying it would happen “immediately” if Ottawa made a trade deal with China. But Prime Minister Mark Carney had announced the agreement a week earlier, initially drawing praise from Trump.

“The current whack-a-mole backdrop of geopolitical conflict continues to support a risk premium in gold,” said Adam Turnquist, chief technical strategist at LPL Financial.

Other metals have gained value, too. Copper was driven higher by a 50 per cent tariff on finished products that the Trump administration imposed in July. Futures tied to platinum and palladium, both used in automotive catalytic converters and other industrial products, have climbed more than 25 per cent since the start of the year.

Turnquist said metals also are being pushed higher by the sinking US dollar, which fell again Monday morning to its lowest point since September. A weaker dollar means foreign currencies are stronger by comparison, boosting foreign investors’ purchases of non-dollar investments.

Stocks, meanwhile, also edged higher: the S&P 500 closed at 6950.23, up 0.5 per cent; the Dow Jones Industrial Average climbed 0.6 per cent to settle at 49,412.40; while the tech-heavy Nasdaq gained 0.4 per cent to finish at 23,601.36.

Silver prices have been driven higher by growing industrial uses in recent years, including solar panels and data centre projects. Silver stockpiles have decreased recently on the Chicago Metals Exchange as shipments leave the US for elsewhere, Gottlieb said.

Gold and silver have also seen a surge in interest from retail investors looking to profit from the run-up in prices, with gold-backed investment funds in North America adding a record of roughly $US51 billion ($74b) in 2025, according to the World Gold Council, a trade group.

Those funds added another $US5 billion in the first few weeks of 2026, indicating the trend has continued into the new year, said Joe Cavatoni, the organisation’s chief markets strategist. “What we’re seeing and hearing is that retail demand [for gold] in the US is higher and going up,” he said.

The increasing popularity of gold and silver raises concern with some personal finance experts. Prices are at historic highs, meaning those who buy in late could be at risk in any potential downturn, said Morningstar portfolio strategist Amy Arnott.

“Even though gold has a reputation as a safe haven, during times of market turmoil it can actually be quite volatile,” Arnott said.

The Washington Post