Gold and silver are breaking records: why precious metals are rising so fast now

The precious metals rally continues. The prices of gold and silver have once again risen to record highs. This continued optimism is driven by increasing geopolitical unrest and expectations of interest rate cuts in the United States.

Interest rate expectations and geopolitical risks

Both precious metals are posting their strongest annual performance since 1979. The gold price broke the previous record of $4,381 per ounce, rising more than 1.5 percent. Silver rose 3.4 percent to just below the $70 per ounce mark.

The recent advance comes as investors anticipate at least two interest rate cuts in 2026 by the Federal Reserve, the US central bank. President Donald Trump has also been publicly insisting on looser monetary policy lately. Lower interest rates make precious metals more attractive because they do not earn interest themselves.

In addition, geopolitical unrest strengthens the role of gold and silver as a safe haven. Tensions are rising in both South America and Ukraine. The United States has tightened its sanctions on Venezuela through an oil blockade, while Ukraine carried out an attack on a Russian oil tanker from the so-called ‘shadow fleet’ in the Mediterranean Sea.

Central banks and investors are driving demand

The price of gold has already risen almost 70 percent this year, thanks in part to continued purchases by central banks and continued inflows into gold-backed exchange-traded funds (ETFs). According to data from the World Gold Council, the number of positions in these funds increased almost every month of 2025 with the exception of May.

The so-called ‘debasement trade’ also plays a role: investors are moving out of government bonds and fiat currencies due to concerns about increasing debt and the risk of loss of value. Dilin Wu, strategist at Pepperstone Group Ltd., explains:

“Today’s rally is largely driven by early positioning around expectations of Fed rate cuts, reinforced by thin liquidity at year-end.”

Other precious metals are also benefiting from the upward trend. Palladium rose more than 4 percent, while platinum rose for the eighth straight trading day and rose above $2,000 for the first time since 2008.