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Gold and silver prices hit record highs on Monday as geopolitical tensions as well as bets on a possible US interest rate cut led to a fresh surge in the precious metals.
The price of gold rose 1.9 percent to $ 4,420 per troy ounce in early trade on Monday. Silver also hit a record, rising 3.4 percent to $69.44 an ounce on Monday.
Analysts said the growing US blockade on Venezuelan oil is a partial explanation for rising precious metals prices, as investors look for “safe haven” assets. US President Donald Trump is understood to be considering military action on Venezuelan soil as he steps up pressure on autocratic President Nicolas Maduro to step down.
“This is a reminder that geopolitical and debilitation concerns have only one hedge – gold,” said Arun Sai, senior multi-asset strategist at Pictet Asset Management. “Debasement” refers to the theory that precious metals, such as gold, are a hedge against the declining value of traditional currencies such as the dollar.
“Investors see gold as a way to offset those concerns but remain invested,” Tsai said, explaining why geopolitical risk factors are being expressed in commodities rather than stocks or bonds.
After a strong rally this year, gold and silver are on track for their biggest annual price surge since 1979, when the Iranian revolution sent oil prices soaring. So far this year, gold has increased by 68 percent and silver by 139 percent.
Market uncertainty caused by Trump’s sweeping “reciprocating” tariffs and his attacks on the independence of the Federal Reserve prompted investors to flock to precious metals this year.
Investors are also increasing their bets on the Fed cutting interest rates next year. Gold prices are supported by expectations of lower interest rates as investors expecting lower returns from holding bonds turn to other assets.
“Elevated tensions between Venezuela and the U.S. could support gold prices at the margin,” said Hamad Hussein, climate and commodities economist at Capital Economics, although he added that “bullish market sentiment” is doing more to push the price higher.
Copper, a widely used industrial metal that is seen as a barometer of global economic health, also hit a new record high of nearly $12,000 a tonne on Monday.
Copper has set several new records since October as a combination of supply disruptions and fears of a shortage, and huge influxes of copper into the US, have driven down inventories elsewhere. The country’s copper supplies have continued to surge in recent weeks amid fears that the US administration could impose additional import tariffs in 2026.
Oil prices also increased on Monday due to increased US pressure on Venezuela. International benchmark Brent crude rose 1.4 percent to $61.31 a barrel.
