Gold Breaks $4,500 for First Time as Rate-Cut Bets Fuel Historic Rally
Gold prices surged to historic highs on Wednesday, breaking above the $4,500 per ounce level for the first time as investors rushed toward safe-haven assets amid growing expectations of U.S. interest rate cuts next year. The rally extended across the precious metals complex, with silver, platinum, and palladium also posting fresh records.
Gold Hits New Record as Investors Seek Safety
Spot gold edged up 0.1% to $4,492.51 an ounce by 0359 GMT after touching an all-time high of $4,525.19 earlier in the session. Meanwhile, U.S. gold futures for February delivery climbed 0.3% to $4,520.60, also marking a record.
Market participants attributed the move to expectations that borrowing costs in the United States will continue to decline in 2026, reducing the opportunity cost of holding non-yielding assets such as gold.
Silver, Platinum, and Palladium Join the Rally
The surge was not limited to gold alone. Silver prices jumped 1.2% to $72.27 an ounce, after hitting an all-time peak of $72.70 earlier in the day. Silver has significantly outperformed gold this year, supported by strong investment demand and its inclusion on the U.S. critical minerals list.
Platinum rose sharply, gaining 3.3% to $2,351.05, after touching a historic high of $2,377.50. Palladium also advanced nearly 2% to $1,897.11, its strongest level in three years.
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Rate-Cut Expectations Drive Precious Metals Demand
Analysts say demand for precious metals is being driven by a combination of safe-haven buying, expectations of lower U.S. interest rates, and ongoing geopolitical and structural shifts in global markets.
Markets are currently pricing in two U.S. rate cuts next year, a factor that has added fuel to the rally. Lower rates typically weaken the dollar and boost demand for commodities priced in U.S. currency.
Thin Liquidity Amplifies Price Moves
With year-end trading volumes remaining thin, price movements have been amplified. However, analysts believe the broader trend remains intact.
Some market watchers suggest gold could move toward the $5,000 level over the next six to twelve months, while silver may advance toward $80 an ounce as investors respond to key psychological thresholds.
Strongest Annual Performance in Decades
Gold has surged more than 70% so far this year, marking its strongest annual performance since 1979. The rally has been supported by:
- Aggressive central bank buying
- Expectations of U.S. rate cuts
- De-dollarisation trends
- Exchange-traded fund inflows
- Heightened geopolitical risks
Silver has climbed more than 150% over the same period, driven by momentum buying and industrial demand.
Analysts See Momentum Continuing
Gold and silver have “been hitting the accelerator pedal this week” as investors look for stores of value amid lower rate expectations and global debt concerns, according to KCM Trade.
Platinum and palladium, which are widely used in automotive catalytic converters, have also benefited from tight mine supply, tariff uncertainty, and a rotation of investment flows away from gold. Platinum is up about 160% year to date, while palladium has gained more than 100%.
Outlook Remains Bullish
While analysts caution that thinner markets can lead to sharp swings, many believe the broader uptrend in precious metals will persist as liquidity improves and investors continue to hedge against economic uncertainty.
For now, gold’s break above $4,500 marks a major psychological milestone, reinforcing its status as the world’s most trusted safe-haven asset in times of change.
