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Gold surged to within striking distance of the $4,500-per-ounce threshold on Tuesday, extending a record-setting run fueled by expectations of looser U.S. monetary policy, a weaker dollar, and steady safe-haven demand as multiple geopolitical flashpoints remain unresolved.
Spot gold climbed as high as $4,497.55, while silver hovered just below the $70 level and briefly printed a new record peak near $69.98. The moves cap a standout year for precious metals, with investors continuing to rotate into hard assets as the macro backdrop turns more supportive and risk premia remain elevated.
Geopolitics and the macro backdrop reinforce the rally
Bullion has notched multiple all-time highs in 2025, supported by the combination of U.S. rate cuts and broad dollar weakness. Several banks and analysts argue the tailwinds are not exhausted, with Goldman Sachs projecting gold could reach $4,900 by December 2026.
The U.S. dollar is down nearly 10% in 2025, putting it on track for its worst annual performance in eight years. Many investors expect the downtrend to persist into 2026 if global growth stabilizes and the Federal Reserve continues easing, a scenario that typically benefits dollar-priced commodities such as gold.
Safe-haven demand has added another layer of support. Traders are watching tensions in the Middle East, uncertainty surrounding a potential Russia-Ukraine settlement, and more recent U.S. actions involving Venezuelan oil tankers, all of which have contributed to a steady bid for defensive assets.
ETF inflows and central bank demand provide structural support
Beyond the macro cycle, investment flows and official-sector buying continue to anchor the market. Analysts say central bank demand has stayed elevated for four consecutive years and is likely to remain a key pillar through 2026.
According to Metals Focus managing director Philip Newman, central banks are on track to purchase around 850 tons of gold in 2025, down from 1,089 tons in 2024 but still “a very healthy figure” in absolute terms.
Meanwhile, physically backed gold exchange-traded funds are on pace for their biggest annual inflow since 2020. The World Gold Council estimates year-to-date inflows of roughly $82 billion, equivalent to 749 tons, highlighting renewed institutional participation as the rally broadened.
High prices cool jewellery demand, but retail buying offsets part of the drag
The sharp rise in prices has started to squeeze traditional jewellery consumption, especially in price-sensitive markets. Metals Focus estimates jewellery demand in India fell 26% year-on-year to 291 tons in January–September, with the fourth quarter also tracking soft and weakness expected to carry into 2026.
That said, the decline has been partly offset by stronger retail investment demand. Metals Focus said bar and coin buying in India rose 13% to 198 tons over the same period, as record prices and bullish expectations drew retail inflows rather than deterring them.
Silver outperforms as investment demand and policy themes accelerate
Silver has outshone gold by a wide margin in 2025, rising more than 140% versus gold’s gain of over 70%. The outperformance has been underpinned by robust investor demand, momentum buying, and supportive policy narratives, including silver’s inclusion on the U.S. critical minerals list.
Flows have been significant. Standard Chartered analyst Suki Cooper said inflows into silver exchange-traded products have surpassed 4,000 tons, reinforcing the view that silver’s rally is being driven not only by fundamentals but also by aggressive allocation shifts and positioning.
With gold nearing $4,500 and silver pressing toward $70, investors are increasingly focused on whether the next phase of the move will be driven by continued easing expectations, incremental geopolitical shocks, or sustained inflows from ETFs and central banks—factors that, together, have kept the precious-metals complex firmly in “buy-the-dip” mode.
