Gold and silver hit new all-time highs, set to achieve the largest annual gain since 1979, driven by two major factors.

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Amid escalating geopolitical tensions and expectations of further interest rate cuts by the US, gold and silver prices have both surged, reaching new all-time highs.

On Tuesday morning New York time, spot silver jumped as much as 2.4%, breaking above $70 per ounce for the first time.

Gold is approaching $4,500 per ounce, continuing to climb after recording its biggest single-day gain in over a month. Platinum and palladium prices have also risen in tandem.

Traders are betting that after three consecutive rate cuts, the Federal Reserve will cut rates again next year, which will benefit precious metals that do not yield interest.

Additionally, over the past week, rising geopolitical tensions have further strengthened gold's appeal as a safe haven, especially in Venezuela. The US has blocked the country's oil tankers and continues to increase pressure on President Nicolás Maduro’s government.

Media reports say Pepperstone Group strategist Ahmad Assiri stated that geopolitical friction is once again part of the market narrative. He mentioned the detainment of oil tankers and said that while these developments have not yet triggered widespread risk-off sentiment, they have undoubtedly increased the background demand for gold as an important hedging asset.

Monthly Increase in Total Gold ETF Holdings

Since the start of the year, gold prices have risen by more than two-thirds, poised for their best annual performance since 1979. The rally has been supported by continued heavy buying from central banks and persistent fund flows into exchange-traded funds. According to data from the World Gold Council, except for May, total gold ETF holdings have increased every month this year.

Analysis indicates that a series of aggressive actions by US President Trump earlier this year aimed to reshape the global trade system, while his threats to the Fed’s independence have also fueled this bull run. Investors have been driven by the so-called “currency devaluation trade,” meaning they are exiting sovereign bonds and their denominated currencies out of concern that expanding debt could erode long-term value.

Strong ETF buying has been one of the main drivers behind the sharp rise in gold prices. Since the start of the year, the world's largest precious metals ETF—the SPDR Gold Trust under State Street—has seen its holdings grow by more than one-fifth.

The chief economist at Muthoot Fincorp said that inflows into gold ETFs in recent months have mainly come from retail investors, rather than institutions. He noted that since retail funds are less sticky, price volatility is likely to remain elevated.

Previously, when gold prices retreated from a stage high of $4,381 per ounce in October, the market briefly believed the rally was overheating. However, gold prices quickly rebounded and now show momentum to extend gains into next year. Goldman Sachs is among several banks predicting gold prices will continue to rise in 2026; its base scenario forecasts $4,900 per ounce, with higher upside risk.

Silver Outshines Gold

Silver has risen about 140% this year, performing even better than gold. The recent rally has been bolstered by speculative inflows, and following an historic short squeeze in October, persistent supply mismatches at major trading centers have also driven prices higher.

In India, boosted by the Hindu festival Diwali, buyers have imported large amounts of silver. Globally, silver ETF holdings continue to climb. This wave of demand has collided with tight inventories in the London benchmark market, causing a supply squeeze there.

Subsequently, silver inflows into London vaults have visibly increased, but the majority of available silver globally remains concentrated in New York. Traders are awaiting the results of a US Department of Commerce investigation into whether imports of critical minerals threaten national security; this could trigger tariffs or trade restrictions on silver.

Meanwhile, in China, silver inventories in warehouses associated with the Shanghai Futures Exchange fell to their lowest level since 2015 last month.

Beyond its financial asset properties, silver is deeply embedded in the global supply chain, widely used in electronics, solar panels, and medical device coatings. According to the industry group Silver Institute, global demand for silver has exceeded mine production for five consecutive years.

Analysts: $4,500 and $70 Not Hard to Break Through

From a technical perspective, the relative strength index for gold has entered overbought territory, with a reading above 80 as of Tuesday. Silver is also near 80 and has remained elevated for about two weeks. Typically, readings above 70 are seen as an overbought signal.

However, this has not deterred investors. Assiri from Pepperstone said there has not been a large influx of sell orders; on the contrary, gold and silver continue to attract buying interest during their ascent.

He pointed out that this behavior suggests $4,500 and $70 are more like reference points in the trend, rather than hard ceilings, so at least for now and through the holidays, both metals retain solid support.

Risk DisclaimerThere are risks in the market; investment should be approached cautiously. This article does not constitute personal investment advice, nor does it consider the individual investment objectives, financial situation, or needs of specific users. Users should assess whether any opinions, views, or conclusions in this article fit their particular circumstances. Investment decisions based on this article are at your own risk. ```