ISLAMABAD: Silver outperformed gold in a powerful rally across precious metals on Friday, as speculative trading, thin year-end liquidity and growing expectations of US interest rate cuts pushed prices to record levels. Rising geopolitical tensions further fuelled demand for safe-haven assets, lifting the entire sector to strong weekly gains.
Spot gold climbed 0.6% to $4,504.79 an ounce in early trading, after touching an all-time high of $4,530.60 earlier in the session. US gold futures for February delivery gained 0.7% to $4,535.20. Silver surged far ahead of gold, jumping 3.6% to $74.56 an ounce after briefly hitting a record high of $75.14.
Kelvin Wong, senior market analyst at OANDA, said momentum-driven and speculative activity has dominated gold and silver trading since early December. He pointed to thin liquidity, expectations of prolonged US rate cuts, a weaker dollar and heightened geopolitical risks as key drivers behind the rally. Wong added that gold could approach $5,000 in the first half of 2026, while silver may climb toward $90.
Gold is on course for its strongest annual performance since 1979, rising nearly 72% so far this year. The rally has been supported by policy easing from the Federal Reserve, strong central bank buying, growing exchange-traded fund holdings and continued efforts by some countries to reduce reliance on the US dollar. Silver has surged an even more dramatic 158% year-to-date, helped by persistent supply deficits, its designation as a critical mineral in the United States and robust industrial demand.
With markets now pricing in at least two US rate cuts next year, non-yielding assets such as gold are expected to remain attractive in a lower interest rate environment.
Geopolitical developments have also added to bullish sentiment. The United States has imposed a temporary quarantine on Venezuelan oil exports, while recent US strikes against Islamic State positions in northwest Nigeria have heightened global risk concerns.
Other precious metals also posted sharp gains. Spot platinum jumped 7.8% to $2,393.40 an ounce after reaching a record $2,429.98, while palladium rose 5.2% to $1,771.14, extending gains from a three-year high in the previous session. Both metals, widely used in automotive catalytic converters, have benefited from tight supply conditions, tariff uncertainty and a shift in investor interest away from gold. Platinum is up about 165% this year, while palladium has gained more than 90%.
