On Friday the 23rd, global metals markets surged to new heights, with both gold and silver, based on the closing prices of front-month futures contracts, recording their largest single-week gains since 2020 and maintaining weekly advances since the start of 2026. New York silver futures and London spot silver both broke through the $100 per ounce barrier for the first time in history, while gold hit a record intraday high for the fifth consecutive session, moving closer to the $5,000 milestone. London copper reclaimed the $13,000 level, approaching the intraday peak set earlier this month. Other precious and industrial metals also posted sharp gains. During US stock market hours, New York palladium futures surged approximately 7%, platinum futures rose over 7%, while London nickel and tin closed up more than 4% and 9.5% respectively on Friday.
This rally is being driven by multiple factors. A weaker US dollar, massive investor outflows from currencies and sovereign bonds, coupled with Trump's criticism of the Fed threatening central bank independence, deteriorating US-Europe relations, and turbulent geopolitical conditions have all heightened risk-off sentiment, collectively fueling the sustained rise in metals. Commentary noted that Trump's remarks about a US "fleet" heading towards Iran prompted investors to flock to silver, gold, and base metals like copper. This refers to reports that President Trump, aboard Air Force One on Thursday the 22nd, told media that the US is mobilizing significant forces towards Iran, with many vessels en route.
Institutions are broadly bullish on the outlook for precious metals. JPMorgan expects gold to reach $5,000 by the fourth quarter of 2026, with a long-term view even pointing to $6,000; Citi, in a bull case scenario, raised its 0-3 month gold price target to $5,000 and its silver target to $100; UBS anticipates silver has about 25% further upside but warns of a potential "rollercoaster" ride within the year.
This metals frenzy reflects an acceleration in the global trend of de-dollarization. Emerging market assets continued their strong start, with investors pouring money into EM funds at a record pace. The $135 billion iShares Core MSCI Emerging Markets ETF attracted nearly $6 billion in January, potentially marking its largest monthly inflow since its inception in 2012.
Silver's gains are resonating with industrial demand and Chinese buying, with New York futures posting a second consecutive week of gains exceeding 10%. On Friday, the front-month COMEX March silver futures contract surged past $103.10 per ounce during US afternoon trading, up about 7% on the day. Spot silver followed suit, rising above $102.87, a gain of nearly 6.9%, with both futures and spot prices setting consecutive intraday records. The front-month silver futures contract gained over 14% for the week, its largest weekly gain since July 2020, marking the second straight week of gains over 10%, and is up more than 40% year-to-date. Silver outperformed gold in 2025, with prices rising nearly 150% for the year compared to gold's over 60% gain, the highest annual increase since 1979. This reflects some investors pivoting to silver as gold becomes relatively expensive. Silver also benefits from robust industrial demand, particularly from the solar industry, with buying from Chinese retail investors adding further upward momentum.
Analysts suggest $100 is a key psychological level for silver. Neil Welsh, Head of Metals at Britannia Global Markets, stated in a Friday report: "Turbulence in the geopolitical order and the new attack on the Fed (by Trump) is triggering safe-haven demand." Ole Hansen, Head of Commodity Strategy at Saxo Bank, commented: "Momentum has clearly become a significant factor influencing price action, with 'fear of missing out' (FOMO) psychology playing a notable role as prices break through historical highs. However, it would be a mistake to attribute this rally solely to speculation."
Activity in the Chinese market is crucial for silver prices. Ole Hansen pointed out that physical silver demand in China remains stronggeno, although rising prices may eventually dampen consumption over the long term. Local futures prices continue to trade at a premium of over $12 per ounce compared to London prices, indicating regional supply tightness and robust demand. Hansen warned: "The risk of demand destruction cannot be ignored if prices accelerate too rapidly; this dynamic could eventually favor a rotation back into gold."
Citi Group aggressively raised its short-term price targets in a report last week. Analysts including Max Layton stated that in a bull case scenario, they have significantly raised their 0-3 month silver price target from $62 to $100 per ounce. Citi noted that due to potential delays in the US Section 232 tariff decision, the persistent physical shortage of silver might worsen slightly in the near term. However, the bank's base case assumes a $70 per ounce target for the next 6-12 months, indicating caution regarding market volatility in the second half of the year.
UBS's research report last week projected that silver prices still have about 25% upside from current levels, but expects prices to gradually retreat by year-end, depicting a "two-half" performance. Strategist Joni Teves stated that the core driver for this forecast adjustment is the surge in trading activity in the Chinese market. Since the second half of 2025, Chinese silver futures trading volumes have skyrocketed, with unexpectedly high investor participation amplifying the impact of market tightness on spot prices. UBS specifically noted that Chinese silver futures trading volume far exceeds that on COMEX, yet Shanghai Futures Exchange silver inventories are less than 10% of COMEX stockpiles.
Gold is increasingly seen as a hedge against Trump-related uncertainty, rising nearly 15% year-to-date. Gold hit a record intraday high during US afternoon trading on Friday, with New York gold futures breaking above $4,990, up nearly 1.6% on the day, and spot gold reaching $4,989.80, a gain of nearly 1.1%. Gold futures recorded their best weekly performance since March 2020 this week, gaining over 8% and rising nearly 15% year-to-date.
Yuxuan Tang, Asia Macro Strategy Head at J.P. Morgan Private Bank, said: "Gold is undergoing a sustained re-rating as the post-WWII rules-based order shows cracks. Faced with the risk of regime shifts that are difficult to quantify, investors are increasingly viewing gold as reliable protection against these risks." Chris Weston, Head of Research at Pepperstone, noted in a report that gold is increasingly behaving like a hedge against Trump "uncertainty." While many traders see gold as a hedge against US-Europe tariff war risks, he pointed out that gold's rally did not reverse after tariff threats subsided. Global central banks, particularly from emerging markets, are looking for reasons almost daily to rotate reserves from dollars into gold. He believes spot and futures gold will hit the $5,000 level "sooner or later," with the target now clearly visible and attracting buyers.
Saxo Bank analysts stated: "This rally is driven by FOMO, while continuing to focus on the broader drivers supporting hard assets after a slight easing of US-Europe tensions. Central bank demand remains firm, the dollar continues to weaken, and governments continue to issue debt with little clarity on long-term repayment." Analysts at Commerzbank wrote in a Friday report: "The search for a safe haven remains the most important driver. However, in the short term, the rally might pause as the Greenland dispute appears temporarily resolved."
Major Wall Street investment banks are broadly bullish on gold's long-term trajectory. Morgan Stanley set a Q4 2026 gold price target of $4,800, a significant increase from its previous forecast of $4,400 set in October 2025. JPMorgan expects gold to reach $5,000 by Q4 2026, with a long-term view even pointing to $6,000. Natasha Kaneva, the bank's Global Head of Commodities Strategy, emphasized in a December 18th report: "The trends driving gold's re-rating are not yet exhausted." She believes that against a backdrop of persistent trade uncertainty and geopolitical risks, demand for diversification from central banks and investors will continue to push gold prices higher. Citi, in a bull case scenario, raised its 0-3 month gold price target from $4,200 to $5,000 per ounce. UBS recently reiterated its gold outlook, suggesting potential for further gains in the first half of the year, with its base case indicating about 9% upside from current levels.
The National Bank of Poland this week approved a plan to purchase an additional 150 tonnes of gold to address heightened geopolitical instability. Meanwhile, India's holdings of US Treasuries have fallen to a five-year low, with gold and other alternatives taking a larger share, reflecting a shift away from the world's largest bond market by some major economies.
Supply disruptions and a weaker US dollar propelled a rebound in London copper. Friday trading on the London Metal Exchange (LME) saw copper prices rise above $13,180 per tonne, up 3.3% on the day, nearing the intraday record set earlier this month. It closed up about 2.8% at $13,115 per tonne, reversing cumulative losses from the first four days of the week and ending the week with a gain of over 2%. LME nickel closed up about 4.2% at $18,756 per tonne, its highest level since June 2024, gaining 6.7% for the week. LME tin closed up about 9.5% at $56,816 per tonne,刷新ing the record closing high set last Wednesday and gaining 18.4% for the week.
The rise in copper prices benefited from a weaker dollar, ongoing supply disruptions, and easing concerns about trade friction between Washington and Europe. The dollar was on track for its first weekly decline this year, making commodities cheaper for buyers holding other currencies. Capstone Copper stated on Thursday that operations at its Mantoverde copper-gold mine in Chile had largely halted due to a three-week labor strike. ANZ analysts said: "Workers have blocked access to the site; the mine can produce approximately 106,000 tonnes annually. There are no plans to resume wage negotiations at this stage."
Trump's disruption of the geopolitical order and his new attacks on the Fed are triggering safe-haven demand. This typically benefits gold and silver primarily, but recently, such effects have spilled over into base metals. This adds further momentum to the copper market, which has been rising since the middle of last year due to major mine disruptions, booming demand from electrification, and a surge in shipments to the US ahead of potential tariffs.
Despite the rise in the benchmark copper price, the spreads between different LME contracts remain modest, as shipments to US and Asian warehouses have eased pressure on buyers following a sharp price spike earlier in the week. On Friday, the cash copper price was at a discount of $74.50 per tonne to the LME three-month benchmark contract, a contango market structure indicating improved supply conditions. This contrasts sharply with Tuesday, when the cash price commanded a premium of over $100 to the three-month contract, a backwardated pattern signaling tight supply.
Traders said inflows into Asian warehouses were partly driven by deliveries booked by Chinese smelters when arbitrage opportunities were profitable. Chinese smelters have increased exports via deliveries to LME warehouses this year, partly because gains in the LME benchmark price have outpaced domestic prices, and a slowdown in the property sector has also impacted consumption. Traders expect more deliveries in the coming weeks, although the arbitrage window is currently closed.
Morgan Stanley is bullish on aluminum and copper, both facing supply constraints amid rising demand. ING analysts noted that the outlook for base metals in 2026 remains constructive, supported by industrial demand from sectors like solar panels and battery technology, alongside sustained investment inflows.
Comments