Hedge buying surges into the market, gold and silver both hit record highs

Friday Asian market trading is hot, and the precious metals market is experiencing a strong rally. Driven by escalating geopolitical tensions and the continued weakening of the US dollar, gold and silver prices have risen simultaneously to record highs, attracting a large influx of safe-haven funds.

Gold Hits New Highs, Approaching $52 Increase

Spot gold temporarily surged to a record high of $4531.34 per ounce during trading, with a single-day increase of nearly $52. This marks another strong performance driven by risk aversion sentiment. Bloomberg analysis indicates that the core factors currently boosting precious metals include increased geopolitical instability and a weakening US dollar index.

Changes in the international situation further strengthen investors’ safe-haven psychology. Tensions in Venezuela have intensified, with the US imposing blockades on oil tankers and increasing pressure on the Maduro government; meanwhile, in Africa, US military operations targeted terrorist organizations in Nigeria. These events have all heightened market demand for safe-haven assets.

Silver Gains Even More, First Breaks $75 Barrier

Spot silver continues its strong momentum, rising for the fifth consecutive trading day, with an intraday jump of 4.5%, breaking through the $75 per ounce mark for the first time. The rally in silver is similarly driven by speculative capital. Since the historic “short squeeze” in October, global silver supply remains significantly imbalanced. London vault inflows continue, but most silver remains in New York. Traders are awaiting the US Department of Commerce’s investigation results—regarding whether tariffs will be imposed on silver—adding further uncertainty that supports prices.

Weakening US Dollar Builds Bullish Foundation

The Bloomberg US Dollar Spot Index fell 0.8% this week, marking the largest weekly decline since June. A weaker dollar directly benefits precious metals— the weaker the dollar, the cheaper gold and silver priced in USD become, attracting more overseas buyers.

Year-to-Date Gains Reach Over 40-Year Highs

In terms of annual performance, gold has increased by about 70%, while silver has surged over 150%, both expected to set their best annual performances since 1979. Factors supporting this rally include continuous central bank purchases, the Federal Reserve’s three consecutive rate cuts leading to lower borrowing costs, and traders betting on further rate cuts in 2026.

Massive ETF buying has been a key driver of recent surges. According to the World Gold Council, gold ETFs have increased every month except May; the largest precious metals ETF—the SPDR Gold Trust—has seen holdings grow by over 20% this year. Silver ETFs are also hot, with ongoing capital inflows pushing prices higher.

Currently, the precious metals market is in a stage of multiple factors resonating: on a macro level, increased geopolitical risks and a weak dollar create safe-haven demand; on a trading level, continuous inflows of ETF and speculative funds provide ongoing buying momentum. This pattern is unlikely to reverse in the short term.