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Gold and silver prices hit new record highs on Monday
Gold and silver surged to record highs on Monday, December 22, buoyed by weak U.S. jobs data and a lower-than-expected inflation reading, which bolstered bets that the Federal Reserve will cut interest rates in January.
Spot gold climbed nearly 2% to a record high of $4,435.58 an ounce, while U.S. gold futures rose 1.6% to $4,455.70 an ounce.
Spot silver jumped nearly 3.2% to a record high of $69.29 an ounce.
“Short-term support is coming from escalating geopolitical tensions between the US and Venezuela,” said an analyst at Nimo.money. “Gold prices have been hovering near record highs in the past few sessions, so this rally represents a benchmark advance amid geopolitical tensions following a rally, during a holiday period when trading volumes are typically lower.”
Gold prices surge
Gold, a traditional safe-haven asset, has risen 67% since the start of the year, fueled by geopolitical and trade tensions, strong buying by central banks, and hopes for interest rate cuts next year. Silver has also surged 125% since the beginning of the year.
Data showed US consumer prices rose 2.7% year-on-year in November, below the 3.1% increase forecast by economists polled by Reuters.
Non-yielding assets, such as gold, tend to rise in a low-interest-rate environment.
As for other precious metals, platinum rose 2.6% to $2,028.34 an ounce, its highest level in more than 17 years, while palladium climbed 3.8% to $1,772.74 an ounce, its highest level in nearly three years.
While markets anticipated an expected interest rate cut by the Federal Reserve on December 10, and optimism returned to artificial intelligence stocks in the previous trading session, economic forecasts for the coming year likely prompted global investors to adopt a defensive stance, seeking to balance their portfolios.
Given the massive fiscal deficits in the US, UK, and Europe, and increasingly in Japan and China, "it's fair to say that the monetary value of gold has re-emerged," according to Matthew McLennan, head of global value at First Eagle Investments.
