Gold and silver prices hovered near historic highs, buoyed by weaker-than-expected US inflation data and growing market bets on interest rate cuts.
By early Friday trading in New York, spot gold edged toward $4,330 per ounce, poised for a second consecutive weekly gain. Thursday’s data revealed that the US core Consumer Price Index (CPI) rose at its slowest annual pace since early 2021, reinforcing expectations of lower borrowing costs—a tailwind for non-yielding precious metals.
However, the latest inflation report’s reliability was undermined by the record six-week government shutdown that ended last month. The Federal Reserve, after delivering its third consecutive rate cut last week, has remained ambiguous about future monetary easing. Traders currently price in roughly a 20% chance of a January rate cut, while President Trump publicly urged aggressive easing next year.
Geopolitical tensions, including the Venezuela crisis, further bolstered gold’s safe-haven appeal. This week, Trump ordered a blockade of all sanctioned oil tankers near Venezuela’s coast. As the US escalates military deployments in the region, pressure on the Venezuelan government intensifies.
Precious metals have rallied sharply this year, with gold and silver on track for their best annual performance since 1979. Silver prices have more than doubled, while gold has surged nearly two-thirds, supported by central bank buying and sustained inflows into gold ETFs.
Goldman Sachs analysts, including Dan Struyven, noted: "Lower US rates have spurred ETF investors to compete with central banks for limited gold supply. We expect structural demand from central banks and cyclical support from Fed easing to remain key drivers of higher prices."
Platinum prices also doubled this year, surpassing $1,980 per ounce to hit their highest level since 2008. The London platinum market shows signs of tightening supply, with banks relocating inventories to the US to avoid tariff risks.
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