Spot gold broke multiple records during this week’s volatile trading sessions, briefly touching $4,650.10 per ounce before retreating slightly to hover around $4,642.40 as of mid-morning Wednesday. U.S. gold futures followed suit, gaining 0.8% to $4,635.70.
Analysts attribute the surge to a confluence of factors. Chief among them is market anticipation of upcoming Federal Reserve interest rate cuts, buoyed by softer-than-expected inflation data. December’s core Consumer Price Index (CPI) rose 0.2% month-over-month and 2.6% annually, both below forecasts. Producer Price Index (PPI) numbers followed the same pattern of moderation.
Lower inflation readings give the Fed more leeway to cut rates, something President Donald Trump has publicly pressed for, encouraging the central bank to pursue “meaningful” rate reductions to stimulate growth. Markets are now pricing in at least two 25-basis-point cuts in 2026, with a growing probability of a third, given signs of a softening labor market. Lower interest rates reduce the opportunity cost of holding assets like gold, which does not yield income. As such, gold typically thrives in low-rate environments or during times of economic uncertainty, making the current moment a near-optimal backdrop for continued gains.
Although gold’s rise is noteworthy, silver has arguably stolen the show. The metal surged by more than 6% on Wednesday alone, reaching a new all-time high of $92.23 per ounce before stabilizing just under that level. For context, silver has climbed nearly 27% to date in 2026, building on a dramatic 150% rise throughout 2025.
The metal’s rise is owed not only to safe-haven flows, but also to rising industrial demand. Silver is an essential component in emerging technologies such as electric vehicles, solar panels, and AI data centers. Additionally, China’s recent export restrictions aimed at building domestic inventory and political leverage have exacerbated supply anxieties in global markets, particularly in hubs like London. Brian Lan, managing director of GoldSilver Central, projected that silver is “likely to see high two-digit percentage gains” this year, with prices potentially reaching between $100 and $144. Alex Ebkarian, COO at Allegiance Gold, agreed that silver is in a “structural bull phase,” driven by both technological demand and monetary policy tailwinds.
Beyond macroeconomic factors, geopolitical conflict has become a powerful accelerant for precious metal prices. In Iran, anti-government protests have erupted into widespread unrest, resulting in as many as 2,500 reported deaths and over 18,000 detainments. The situation has escalated into an international flashpoint, as President Trump has threatened intervention while Iran has warned of retaliatory strikes on U.S. military bases in the region.
The instability has revived investor memories of earlier Middle Eastern crises when gold became a go-to hedge against geopolitical risk. Demand for durable, non-sovereign stores of value, such as gold and silver, tends to spike in such environments.
Perhaps most alarmingly for markets, the U.S. Federal Reserve has come under direct political and legal assault. The Justice Department has opened a criminal investigation into Fed Chair Jerome Powell, focusing on renovations at the Fed’s headquarters and alleged inconsistencies in his testimony to Congress. The development significantly elevates concerns over central bank independence.
Powell responded with a defiant public video, calling the investigation an “unprecedented action” meant to pressure the central bank into compliance. In an unusual show of solidarity, global central bank leaders, including the European Central Bank, the Bank of England, and the Bank of Canada, issued a joint statement backing Powell and warning against political interference.
These events have led to a crisis of confidence, with investors questioning the long-term stability of U.S. fiscal and monetary institutions. As Julius Baer’s Carsten Menke told Bloomberg, “increased interference with the Fed is a key bullish wildcard for precious metals in 2026.”
The massive price movements have also sparked responses from regulators. The CME Group, operator of major metals exchanges, has updated its margin requirements for gold and silver, shifting from fixed-dollar to percentage-based margins to reflect volatility. While intended to protect against extreme price swings, the changes may temporarily limit speculative momentum.
Notably, this comes just weeks after previous hikes in margin requirements temporarily cooled silver’s meteoric rise, a reminder of the delicate balancing act regulators face in highly volatile markets.
Looking ahead, banks and analysts expect the rally to continue, albeit with significant volatility. ANZ predicts that gold could cross the symbolic $ 5,000-per-ounce level in the first half of 2026. ING, meanwhile, sees a realistic path for multiple Fed rate cuts, contingent on inflation remaining subdued and employment growth slowing.
The caution lies in potential over-extension. Record margins, speculative exchanges, and heavy reliance on geopolitical developments could reverse quickly if de-escalation occurs in hotspots like Iran or if inflation returns unexpectedly strong.
In 2026, the world appears to be caught in a maelstrom of uncertainty. Inflation, political pressure on monetary authorities, and geopolitical upheaval are all converging, creating a perfect storm for gold and silver to shine. While risks remain, the enduring appeal of these tangible assets appears more resilient than ever, making this rally not just a market event but a reflection of a world in search of stability.