"Boiling" precious metals: Gold breaks 4000, silver approaches 50, palladium surges 10%

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A wave of risk aversion sweeping the globe is pushing the precious metals market to a “boiling” peak.

With multiple global risk factors overlapping, the price of gold has broken through the historic $4,000-per-ounce mark, with a year-to-date increase of 54%.

But the market “boil” is not limited to gold. Silver's rise has been even sharper, with a year-to-date increase of over 67%, outperforming gold, and prices are approaching $50.

Meanwhile, palladium prices soared nearly 10% on Wednesday, surpassing $1,482, marking the biggest single-day gain since May 2023.

Behind the surge in precious metals are a series of overlapping risk factors, including geopolitical tensions, concerns over the strength of the US dollar, questions over the independence of the Federal Reserve, persistent inflationary pressures, and sluggish economic growth in Europe. Analysts believe there are currently almost no factors that could halt this surge, and predict this metals bull market could persist to 2026.

Gold: Resonance of Risk Aversion and Central Bank Buying

The core driving force behind this round of gold’s bull market is the widespread global demand for safe-haven assets.

The market generally believes that from the Trump administration’s trade tariff policies to the Russia-Ukraine conflict, and worries about inflation, nearly all traditional drivers for gold are acting simultaneously. BNP Paribas analyst David Wilson said:

If you are an investor, where would you put your money? If you worry about the US economic and debt outlook, would you still want to buy traditional safe-haven US government bonds? The answer is no.

In addition to individual investors’ demand for safety, continuous purchases by central banks have provided solid support to gold prices. According to consultancy Metals Focus, since 2022, global central bank gold purchases have exceeded 1,000 tonnes annually, and are expected to reach 900 tonnes this year―a level twice the 2016-2021 annual average.

With strong fundamentals, market expectations for gold prices continue to rise. On Monday, Goldman Sachs raised its December 2026 gold price forecast to $4,900 per ounce. SP Angel analyst John Meyer described this round of price movement as “a once-in-a-generation trend.”

Silver: Driven by Both Industrial and Investment Demand

In this round of precious metal price rises, silver’s performance has outshone even gold. Currently, silver has achieved its largest year-to-date gain since 1979, with its outperformance versus gold the best in 15 years.

This Wednesday, the most active silver price closed at a record high of $48.994, briefly breaking $49 in intraday trade, the first time above this level in 14 years. Compared to gold’s $4,000 breakthrough, silver’s price seems insignificant, but so far this year, silver has jumped 67.55%, exceeding gold’s 54.13% by 13.42%.

Silver’s strength comes from the double driver of its industrial and investment attributes. On one hand, the boom in areas such as solar panels and AI-related semiconductors has generated robust industrial demand. On the other hand, some investors who think gold is too crowded are shifting focus to silver as an alternative safe-haven.

Additionally, the silver market is much smaller than gold, meaning dollar value fluctuations have a greater impact on its price. Louis-Vincent Gave, founding partner of Gavekal Research, wrote in a report that unless the Federal Reserve turns hawkish or the dollar strengthens sharply, it’s hard to stop the precious metals bull market―and at present, these scenarios seem unlikely.

Paul Wong, market strategist at Sprott Asset Management, believes that if silver prices can remain above $50, “the market may be reassessing silver’s economic value and store-of-value function.”

Palladium: Follows the Trend, Sets Two-Year High

The strength of gold and silver has also spread to the platinum group metals. Mainly used in automotive emission catalyst converters, palladium soared nearly 10% this Wednesday for a third consecutive daily gain, rising above $1,482 per ounce―the highest since May 2023.

In the past month, palladium prices have risen more than 20%, outpacing gold’s 11% and silver’s nearly 17%. Although current prices are still less than half its all-time high of $3,400, its nearly 49% gain so far this year is almost on par with gold’s performance.

Palladium’s rise has been mainly driven by investment momentum across the entire precious metals sector. In times of surging political and economic uncertainty, investor demand for safe havens is spreading from gold and silver to other types of precious metals.

Risk Warning and DisclaimerThe market carries risks, investment requires caution. This article does not constitute individual investment advice, nor does it consider any individual’s particular investment objectives, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article are suited to their circumstances. Investing accordingly is at your own risk. ```