Gold prices soared to an unprecedented high of over $4,500 an ounce on Wednesday, as investors flocked to precious metals amid global economic uncertainties and anticipation of further cuts in U.S. interest rates. Silver and platinum also reached record levels in the trading session.

Spot gold increased by 0.1% to $4,492.51 per ounce as of 0359 GMT, having earlier touched a peak of $4,525.19. U.S. gold futures for February delivery also climbed, rising 0.3% to a record high of $4,520.60.

Silver experienced a more substantial gain, increasing by 1.2% to $72.27 an ounce after hitting an all-time high of $72.70. Platinum followed suit, jumping 3.3% to $2,351.05, having previously reached a historic peak of $2,377.50. Even palladium saw a rise, climbing almost 2% to $1,897.11, its highest point in three years.

According to Ilya Spivak, head of global macro at Tastylive, precious metals are increasingly viewed as a speculative asset, particularly in the context of de-globalisation. “Precious metals have become more of a speculative narrative around the idea that, with de-globalisation, you need an asset that can act as a neutral go-between, without sovereign risk, particularly as tensions between the U.S. and China persist,” he stated.

Spivak further noted that while thin year-end trading volumes may have amplified the recent price movements, the underlying trend is expected to continue. He predicts gold could reach $5,000 within the next six to twelve months, with silver potentially climbing towards $80 as markets react to key psychological levels.

This year has witnessed a remarkable surge in gold prices, exceeding 70% – its largest annual increase since 1979. This growth is attributed to safe-haven demand, expectations of U.S. interest rate reductions, strong central bank purchases, de-dollarisation efforts, and increased investment in Exchange Traded Funds (ETFs). Traders are currently anticipating at least two rate cuts in the coming year.

Silver has outperformed gold, experiencing a jump of over 150% during the same period. This is driven by robust investment demand, its designation as a critical mineral in the U.S., and momentum buying.

Tim Waterer, chief market analyst at KCM Trade, explained the recent acceleration in gold and silver prices. “Gold and silver have been hitting the accelerator pedal this week with fresh record highs, reflecting their appeal as stores of value amid expectations of lower U.S. rates and lingering global debt,” he said.

Platinum and palladium, essential components in automotive catalytic converters for reducing emissions, have also seen significant gains this year. Platinum is up approximately 160%, while palladium has increased by over 100% year-to-date, fueled by tight mine supply, tariff uncertainties, and a shift in investment from gold.

Spivak added that the increases in platinum and palladium are largely a “catch-up” phenomenon, but cautioned that the relatively low liquidity in these markets could lead to volatility once trading volumes normalize.

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