Persistent geopolitical tensions continue to provide support for the precious metals market, with silver hitting a record high and gold also nearing its all-time peak. As of writing, spot silver rose 2.7% to $73.85 per ounce, marking its fifth consecutive day of gains. Silver has surged approximately 150% this year, with the rally accelerating further since a historic short squeeze occurred in October. Spot gold prices edged higher, once approaching the historic high above $4,525 set on Wednesday. As of writing, spot gold was up 0.55% at $4,504. Frictions arising from the US-imposed tanker blockade on Venezuela have enhanced gold's safe-haven appeal. Traders are also betting on further interest rate cuts from the Federal Reserve in 2026. Earlier this week, influenced by escalating tensions in Venezuela and market expectations for further Fed rate cuts next year, gold prices had already set consecutive record highs, breaking through the $4,500 per ounce barrier for the first time. Year-to-date, gold prices have surged over 70%, primarily driven by increased gold purchases by central banks and substantial inflows into gold ETFs. Gold is on track for its best annual performance since 1979. Data from the World Gold Council shows that, except for May, total holdings in gold ETFs have grown every month this year. Several institutions have recently released their views on gold. Goldman Sachs noted in its report that the Fed has entered a long rate-cutting cycle, and falling real interest rates are favorable for gold. A potential cyclical weakening of the US dollar would further enhance gold's attractiveness. J.P. Morgan added that growing global investor concerns about the stability of the financial system, coupled with the debt unsustainability of the US, Europe, and some G7 members, is eroding the status of fiat currencies and reinforcing gold's role as the ultimate safe-haven asset. Silver has also achieved a series of heated gains. Experts suggest this may be related to the unique relationship between the two metals. Steven Orrell, Vice President and Portfolio Manager at Orrell Capital Management and the OCM Gold Fund, stated, "Historically, during bull markets for precious metals, the price of silver typically lags behind gold initially, followed by a significant catch-up rally, just as we are witnessing. Silver's performance has trailed gold's for the past five years, only experiencing a sharp surge last month. Given that gold's performance this year can be described as historic, the close correlation between silver and gold as precious metals is undoubtedly a major factor driving its price appreciation."
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