Gold Hits $5,600; Silver Approaches $120 Amid Rising Geopolitical Tensions

Key Points Summary:

• Gold prices soared to a record near $5,600 per ounce as geopolitical tensions and economic uncertainties drive demand for safe-haven assets.

• Silver also experienced significant price movements, coming close to $120 an ounce amid growing investor interest.

• Analysts suggest that while a pullback in gold prices may be imminent, fundamental factors will continue to support prices throughout 2026.

Gold prices continued their remarkable ascent on Thursday, reaching a record high just below $5,600 an ounce, as investors flocked to safe-haven assets amidst rising geopolitical tensions and economic uncertainties. Spot gold surged by 2.6%, trading at $5,538.69 per ounce around 0349 GMT, after hitting an earlier peak of $5,591.61.

Marex analyst Edward Meir noted, "Growing U.S. debt and uncertainty resulting from the fracturing of the global trade system are compelling investors to seek refuge in gold." The precious metal broke the $5,000 barrier for the first time earlier this week and has witnessed a remarkable rally, gaining over 10% within the past week alone. This surge can be attributed to robust safe-haven demand, increased central bank purchases, and a weakening dollar.

OCBC analysts emphasize that "gold is evolving beyond a mere crisis hedge or inflation protector; it is increasingly recognized as a stable and reliable store of value, providing diversification across diverse macroeconomic conditions." In fact, gold has appreciated by more than 27% this year, building on an impressive 64% increase in 2025.

Despite the rapid price growth, IG market analyst Tony Sycamore cautioned that the "parabolic nature of this rally indicates a pullback might be imminent, yet the underlying fundamentals are expected to support prices into 2026, making any subsequent dips attractive for buyers."

Geopolitical developments also influenced the market, with U.S. President Trump’s recent comments encouraging Iran to negotiate a nuclear weapons deal, inadvertently raising tensions. Iran's threat to retaliate against the U.S. and its allies further fueled market anxieties.

The Federal Reserve's decision to keep interest rates unchanged reinforced the environment for gold, as Fed Chair Jerome Powell warned that inflation levels are likely to remain significantly above the central bank’s 2% target through December. Additionally, Tether’s announcement to allocate 10%–15% of its investment portfolio to physical gold provided an additional boost to the market.

As demand for gold surged, stores in Shanghai and Hong Kong reported an influx of customers eager to purchase the precious metal, with many speculating on the potential for further price increases. Meanwhile, spot silver prices rose by 0.6% to $117.30 an ounce, following a record high of $119.34 earlier in the day. The market for silver is driven by investors seeking more affordable options compared to gold, alongside ongoing supply shortages and dynamic momentum buying, resulting in a year-to-date increase of over 60%.

Standard Chartered analysts predict that the silver market is likely to see yet another deficit this year, attributing the tightness to a reduction in available above-ground stocks. In related market movements, platinum saw a rise of 1.6% to $2,739.48 an ounce after hitting a record of $2,918.80 earlier this week, while palladium dipped by 1.3% to $2,047.00.