Gold and silver hit record highs early Monday, with teh yellow metal landing solidly above $4400 an ounce, buoyed by haven demand amid the ramped up tensions between the U.S. and Venezuela as well as a weaker dollar and expectations of additional U.S. interest rate cuts.
The U.S. intensified pressure on the government of Venezuelan President Nicolas Maduro by bolstering an oil blockade. At the same time, the conflict between Russia and Ukraine escalated after Ukraine took aim at oil tankers attributed to Russia’s shadow fleet in the Mediterranean Sea. Investors typically turn to gold at times of geopolitical and economic uncertainty.
The softness in the dollar also supported the yellow metal, making it more affordable to holders of other currencies. Speculation of multiple U.S. interest rate cuts in 2026 also spurred gold, as lower rates make gold a more attractive asset for investors.
February gold futures rose 1.4% last week to settle at $4,387.30 an ounce on Comex, after the most-active contract advanced 0.5% Friday. Bullion is up 3.1% in December after gaining 6.5% in November and increasing 3.2% in October. It’s up 66% this year. The metal rose 27% in 2024, its biggest annual gain since 2010. The February contract blazed up $70.1 (+1.60%) an ounce to $4457.40 and the DG spot price is $4423.30.
The U.S. has pursued a third oil tanker off the Venezuelan coast, a U.S. official told the Washington Post on Sunday, one day after U.S. forces boarded a different commercial vessel. Meanwhile, the New York Times reported that Ukraine has used drones four times in the past few weeks to hit oil tankers from Russia’s shadow fleet.
Separately, bets increased that the U.S. will cut interest rates at least twice in 2026 after a mix of economic data last week, including an inflation gauge that came in lower than expected for November and an unexpected increase in the U.S. unemployment rate to the highest level since September 2021 in November. The Federal Reserve closely watches both inflation and labor market data when setting monetary policy.
The Fed cut interest rates for a third consecutive time earlier this month to 3.50% to 3.75% and maintained its outlook for just one interest rate cut in 2026. The central bank began raising interest rates in March 2022 to fight inflation, ultimately imposing increases of by 5.25 percentage points before beginning rate cuts last year.
President Donald Trump is due to appoint a successor to Fed Chairman Jerome Powell early in the year and is likely to name someone who shares his desire for lower interest rates.
Over 80% of investors are betting that the Fed will keep interest rates unchanged at the next policy meeting at the end of January, according to figures tracked by the CME FedWatch Tool. About 21% expect another 25 basis point cut.
March silver futures rose 8.8% last week to settle at $67.49 an ounce on Comex after the most-active contract rallied 3.5% Friday. The white metal hit a series of record highs this month on a historic squeeze in the London market. Silver is up 18% this month after increasing 19% in November and rising 3.3% in October. It’s up 131% this year after rising 21% in 2024. The March contract is currently up $1.516 (+2.25%) an ounce to $69.005 and the DG spot price is $68.85.
Both gold and silver are heading for their best annual performances since 1979.
Spot palladium gained 13% last week to $1,722.50 an ounce after advancing 0.4% Friday. Palladium is up 19% this month after adding 0.5% in November and rising 14% in October. Palladium is up 86% this year after dropping 17% in 2024. Currently, the DG spot price is up $64.60 an ounce to $1781.00.
Spot platinum increased 13% last week to $1,988.60 an ounce after rallying 3.3% Friday. It’s up 20% in December after climbing 4.7% in November and rising 1% in October. Platinum is up 118% in 2025 after losing 8.4% in 2024. The DG spot price is currently up $91.50 an ounce to $2084.10.
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