(Bloomberg) -- Silver broke above $90 an ounce for the first time and gold flirted with a record high as attacks on the Federal Reserve, the prospect of more US rate cuts and a tense geopolitical backdrop added impetus to a blistering rally in precious metals.
The white metal jumped as much as 5.3% to touch $91.5535 an ounce, while gold was within $10 of an all-time peak. Underlying US inflation in December wasn’t as high as feared, but economists said the data was artificially depressed by the record-long government shutdown. The Fed is expected to pause rate cuts for several months, but swaps markets are pricing in at least two more later in the year.
Precious metals are off to strong starts this year, building on dramatic rallies in 2025, with the prospect of a criminal indictment against Federal Reserve Chair Jerome Powell reviving worries about the monetary authority’s independence. Central bankers across the world have rallied behind Powell and JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon said the move could backfire.
Haven demand has also been aided by US President Donald Trump’s capture of Venezuela’s leader, his renewed threats to take Greenland, and violent protests in Iran that could lead to a toppling of the Islamic regime there. Citigroup Inc. upgraded its three-month forecasts for gold and silver to $5,000 per ounce and $100 an ounce, respectively.
Silver is benefiting from a broader rotation into commodities, said Hao Hong, chief investment officer at Lotus Asset Management Ltd. It looks like the rally “has a lot of room to run this year, with prices potentially reaching $150 an ounce by year-end,” he said.
The white metal outperformed gold last year, with a surge of 150% thanks to a short squeeze in October, persistent supply tightness in London and a lot of speculative buying. Traders are also waiting for the outcome of the US Section 232 investigation, which could lead to import tariffs on silver.
“Fear about tariffs being added to silver has led to a large amount of silver getting stuck in the US, limiting flows into the global market,” said Liu Shiyao, an analyst at Zijin Tianfeng Futures Co. Ltd.
The latest gains in precious metals underline how strong investment flows have been, with speculative interest surging from Shanghai to New York. Trading volumes on the Comex and the Shanghai Futures Exchange have remained at elevated levels since late December.
Silver surged 4.6% to $90.9590 an ounce as of 12:31 p.m. in Singapore. Gold rose 0.9% to $6,626.43, near the all-time high of $4,634.55 reached on Tuesday. Platinum and palladium both jumped more than 4%, while the Bloomberg Dollar Spot Index was steady.
Demand for gold and silver as a “hedge against inflation or financial instabilities” should continue this year, although gains are unlikely to be as strong as in 2025, said David Chao, a global market strategist at Invesco Asset Management. “Gold is likely to outperform silver this year, due to recent geopolitical uncertainties.”
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