Gold, silver hit record highs as geopolitical tensions drive haven demand

Prices of gold and silver climbed to record highs in Asian trade on Monday, as escalating geopolitical tensions between Iran and Israel and a potential U.S.-Venezuela conflict drove up demand for safe-haven metals.

According to ICE data, spot gold went up 1.5% to $4,404.77 a troy ounce after reaching a record high of $4,409.50 an ounce earlier on Monday. The gain pushed bullion past its October peak, while February gold futures jumped more than 1% to a high of $4,442.55/oz.

Traders are increasingly betting that the Federal Reserve will cut interest rates twice in 2026 after a series of economic data releases last week suggested slowing growth. US President Donald Trump has also called for looser monetary policy, which tends to support precious metals, as they do not pay interest.

Safe-haven demand builds amid growth concerns

Monday’s gains in metal markets are the latest in a long-running rally in the sector, as worries over slowing global economic growth drove demand for safe-haven assets. Expectations of easier monetary policy have further reduced the opportunity cost of holding physical metals.

“Gold is driven by a range of structural and cyclical supports—including a Fed easing cycle, persistent central-bank demand, and elevated geopolitical and policy uncertainty. Even as some near-term drivers fade, gold continues to behave as a strategic portfolio allocation rather than a purely tactical hedge,” OCBC analysts said.

They cautioned that silver could retreat on “signs of slowing industrial demand or growth concerns.”

US-Venezuela, Middle East tensions boost haven demand

Haven demand was supported by weekend reports that Israel was planning to brief the U.S. over attacking Iran again, amid concerns that Tehran is advancing its nuclear program.

Earlier in 2025, the two nations exchanged a series of strikes, culminating in U.S. airstrikes on Tehran’s nuclear facilities and a subsequent ceasefire with Israel.

Israeli Prime Minister Benjamin Netanyahu and U.S. President Donald Trump are set to meet in the U.S. later in December, with Netanyahu expected to push for additional measures against Iran.

Adding to global geopolitical uncertainty, weekend reports indicated the U.S. was preparing to board a third tanker off Venezuela’s coast, amid rising tensions between Washington and Caracas.

Washington, under Trump, has accused the Venezuelan government of using oil money to fund drug shipments and illegal immigration to the United States. Last week, Trump ordered a blockade of sanctioned oil tankers travelling to and from the country, and also raised the possibility of a ground campaign against the South American country.

Gold climbs to record high on rate-cut bets and risk

Bullion is on track for its strongest annual performance since 1979. Gold has risen about two-thirds this year, helped by increased central-bank purchases and inflows into bullion-backed exchange-traded funds. Trump’s aggressive moves to reshape global trade, as well as his threats to the US central bank’s independence, also added momentum to the rally earlier this year.

Investors have also helped drive gold higher, partly due to the so-called debasement trade, a move away from sovereign bonds and their currencies over concerns that rising debt will erode their value over time.

Gold-backed ETFs have seen inflows rise for five straight weeks, according to Bloomberg data, and World Gold Council data show total holdings in these funds have risen almost every month this year.

“Today’s rally is largely driven by early positioning around Fed rate-cut expectations, amplified by thin year-end liquidity,” said Dilin Wu, a strategist at Pepperstone Group Ltd. Sluggish jobs growth and softer-than-expected US inflation in November supported the narrative for more rate cuts, she said.

Gold has quickly bounced back after falling from its October peak, a pullback that many considered as an overheated rally. The precious metal is now positioned to carry gains into next year. Goldman Sachs Group Inc. is among several banks forecasting further increases in 2026, with a base-case scenario of $4,900 an ounce with risks to the upside.

According to the bank, ETF investors are starting to compete with central banks for limited physical supply of gold.

Dilin Wu of Pepperstone said that central-bank buying, physical demand, and geopolitical hedging provide “medium- to long-term anchors, while Fed policy and real rates continue to drive cyclical swings.” She added that new entrants to the gold market, including stablecoin issuers like Tether and certain corporate treasury departments, were creating a “broader capital base” that “adds resilience to demand.”

Silver outpaces gold with sharp gains

Spot silver climbed 2.8% to $69.06 an ounce after hitting a high of $69.45 an ounce earlier in the session, the data showed. Silver futures reached a peak of $69.515/oz.

Silver’s recent advance has been buoyed by speculative inflows and lingering supply dislocations across major trading hubs following a historic short squeeze in October. The total trading volume for silver futures in Shanghai surged earlier this month, reaching levels near those observed during the crunch a few months ago.

Platinum and palladium extend rally

Precious metal prices were also likely boosted from expectations for more central-bank purchases and further rate cuts by the Federal Reserve.

Platinum — which has rallied around 125% this year — has risen with added speed in recent days as the London market shows signs of tightening. Banks are holding more metal in the US to hedge against the risk of tariffs, while strong demand from China has supported robust exports and trading on the Guangzhou Futures Exchange.

Spot palladium surged nearly 5% to a near three-year high of $1,799.20/oz.

Spot gold rose 1.5% to $4,404.12 an ounce as of 1:49 p.m. in Singapore. Silver advanced 2.5% to $68.85. Platinum climbed 4% and palladium rose 4.4%. The Bloomberg Dollar Spot Index fell 0.1%.

The main factors affecting the market were the prospect of more rate cuts and “geopolitical concerns, particularly around Ukraine and the Trump administration’s recent national security strategy,” said Nicholas Frappell, global head of institutional markets at ABC Refinery in Sydney, adding that Japan-China tensions and the situation in Venezuela were also supporting gold

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