Key events
Gold was already on track for its best year since 1979, and is up 68% since 1 January.
Some economists have predicted previous metals will keep rising next year – but others aren’t convinced.
Capital Economics told clients:
Gold prices may be widely expected to keep hitting record highs in 2026, but we’re not convinced. We expect fundamentals to reassert themselves, pulling prices back to $3,500 an ounce by year end. So goes gold, so goes silver: the end of the speculative boom in the former will also kill off the stunning recent rally in the latter.
Introduction: Gold and silver hit record highs
Good morning and welcome to our rolling coverage of business, the financial markets and the world economy.
Any wise men looking to buy gold, or silver, this Christmas face a record bill.
Precious metal prices are hitting unprecedented levels this morning, as investors seek out safe-haven assets that might protect them from geopolitical risks and loosening monetary policy.
Gold has broken through the $4,400 barrier for the first time; it’s up 1.8% today at $4,417.53 per ounce.
The silver price has risen 3% today to a record high of $69.14 per ounce.
Analysts are attributing the rally to growing expectations of further US rate cuts, and also strong safe-haven demand after Donald Trump and his top aides refuse to rule out war with Venezuela.
The US is intensifying its oil blockage against Venezuela, putting more pressure on the government of President Nicolás Maduro; two vessels have been seized off the cost of Venezuela in international waters in recent days, with a third now being pursued…
This comes after gold posted its highest weekly close on record.
Tony Sycamore, market analyst at IG, explains:
The gains were driven by last week’s softer-than-expected US inflation and jobs reports, which reinforced expectations for two 25bp Fed rate cuts in 2026.
The upside was also supported by geopolitical tensions after President Trump announced a “total and complete” blockade on sanctioned Venezuelan oil tankers and Ukraine-Russia peace talks appeared to stall.
Because precious metals don’t provide a yield (unlike bank reserves which earn interest, bonds which have a coupon, or shares which get a dividend payment), they are more attractive when interest rates are falling.
The US Federal Reserve could be more likely to cut interest rates after US inflation slowed in November, although economists have warned that this report appears flawed (some of this data was estimated…).
The agenda
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