Gold and silver hit record highs amid investor demand for safe haven assets

BBC
BBC
2h ago
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Gold and silver hit record prices due to expected US rate cuts, geopolitical risks, and central bank buying.
Gold and silver hit record highs amid investor demand for safe haven assets
A What happened
The gold price rose over 68% since the start of the year, marking the largest annual increase since 1979. Investors are shifting to precious metals like gold and silver as safe havens due to slow-burning trends around US interest rates, trade tensions, and geopolitical unrest. Expectations are for two US rate cuts in 2026, which diminish bond returns and make commodities more attractive. Central banks globally are expanding gold reserves to reduce dependence on the US dollar and buffer against economic volatility. Silver's record price is also driven by its industrial uses and supply limitations. Brent crude oil prices rose due to US sanctions enforcement on Venezuelan oil shipments but remain below earlier 2025 levels.

Key insights

  • 1

    Safe haven demand reflects structural economic uncertainty: The surge in gold and silver prices highlights investors’ growing concern about inflation, geopolitical conflicts, and the stability of financial markets, driving them toward precious metals as perceived monetary anchors.

  • 2

    Central bank gold accumulation signals strategic economic diversification: Global central banks are shifting reserves into physical gold to reduce reliance on the US dollar amid ongoing trade frictions and potential currency volatility, indicating a realignment in monetary reserve strategies.

  • 3

    Interest rate expectations alter investment flows: Predicted US Federal Reserve rate cuts decrease bond yields, pushing investors toward non-yielding assets like gold and silver to seek returns and portfolio diversification during economic uncertainty.

Takeaways

Record gold and silver prices reflect investor and central bank strategies to hedge against economic instability, inflation, and geopolitical tensions, underscoring persistent global financial uncertainty.

Topics

Business & Markets Markets Economy World & Politics Policy & Regulation Trade & Tariffs

Read the full article on BBC

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