Gold, silver, platinum and palladium hit new highs! Year-end liquidity, interest rate cut cycles, and geographical risk combine to show historic market conditions in the precious metals market

The Zhitong Finance App learned that gold, silver, and platinum prices collectively hit record highs on Friday, driven by speculative purchases and tightening market liquidity at the end of the year, compounding the market's expectations that the Fed will cut interest rates further and geopolitical tension will intensify.

As of press release, spot gold rose 0.85% to $4517.63 an ounce, previously hitting a record high of $4531.24 an ounce; New York gold futures for February delivery rose 0.97% to $4546.5 an ounce.

Spot silver rose 4.16% to 74.8705 US dollars per ounce, breaking the 75 US dollar mark at one point.

Kelvin Wong, senior market analyst at OANDA, said: “Since the beginning of December, momentum driven and speculative traders have driven the rise in gold and silver prices. Thin liquidity at the end of the year, market expectations that the US will maintain a long cycle of interest rate cuts, the weakening of the US dollar, and another escalation of geopolitical risks have combined to push precious metals prices to new historical highs.”

“Looking ahead to the first half of 2026, gold may move towards $5,000 per ounce, while silver has the potential to reach around $90 per ounce.”

Since this year, gold has performed strongly and recorded its biggest annual increase since 1979, driven by the Federal Reserve's policy easing, geopolitical uncertainty, strong demand for gold purchases by the central bank, increased ETF holdings, and the ongoing de-dollarization process. Silver soared 158% during the year, far exceeding gold's increase of nearly 72%, thanks to structural supply and demand gaps, classified as a key mineral in the US, and strong industrial demand.

As the market digests expectations that the Federal Reserve will cut interest rates twice next year, interest-free assets such as gold may continue to receive strong support in a low interest rate environment.

On the geopolitical side, the US is focusing on implementing “quarantine” measures against Venezuelan oil in the next two months. On Thursday, the US launched an attack on Islamic State militants in northwestern Nigeria in response to their attacks on local Christian communities.

Meanwhile, spot platinum rose more than 8% to $2451.25 an ounce, continuing a record high; palladium rose 5.55% to $1822.70 an ounce, continuing the three-year high on the previous trading day. All precious metals are expected to record gains this week.

Prices of platinum and palladium, which are widely used in automotive catalytic converters, rose sharply due to tight supply, tariff uncertainty, and shifts in demand for some gold investments. Platinum increased by about 165% during the year, and palladium rose by more than 90%.

According to information, earlier this month, the European Union unexpectedly adjusted the 2035 internal combustion engine ban policy, and relaxed the 2035 carbon dioxide emission target from a 100% reduction from the 2021 level to a 90% reduction. Platinum is a key material for internal combustion engine-related technology, and its demand prospects are supported by this policy adjustment. In addition to strong physical demand, global supply of platinum is expected to experience annual shortages for the third year in a row, mainly due to supply disruptions in major producer South Africa.

Jigar Trivedi, senior research analyst at Reliance Securities in Mumbai, said: “Strong industrial demand supports platinum prices, while US inventors are making up positions due to concerns about sanctions-related risks, which helps maintain high prices.”