GOLD posted its strongest weekly performance since 2020, climbing close to $5,000 an ounce on Friday, while silver surged past $100 in a dramatic rally driven by what analysts call the ‘debasement trade.’
The precious metal complex is on track for its best week in four years, with gold up around 14 percent so far this year. According to Goldman Sachs, the rally is no longer just fuelled by central banks, but private investors are now piling in as well.
Market strategists point to several forces behind the surge, including a weakening US dollar, growing expectations that the Federal Reserve will cut rates, widening fiscal deficits, and declining appetite for government bonds.
Earlier in the week, a major Danish pension fund announced plans to divest from US Treasurys following President Trump’s renewed push over Greenland. Reuters also reported that large investors in Northern Europe were reassessing their exposure to US assets amid rising geopolitical tensions.
READ ALSO: How gold-for-arms trade fuels terror in Nigeria’s North-West (1)
“The cat is out of the bag,” said Head of Commodity Strategy at Saxo Bank, Mr Ole Sloth Hansen, in a post on X. He added that gold’s strong demand reflected ongoing concerns about deteriorating fiscal discipline in the United States.
Silver has outperformed gold even more dramatically, jumping 29 percent year to date. Unlike gold, a significant portion of silver supply is consumed by industrial applications, Yahoo Finance reported.
China has also been building up silver reserves for domestic use and has restricted exports since the beginning of the year, further tightening global supply.
JPMorgan analysts warned last week that silver prices had already exceeded their forecasts, though they noted that predicting a peak was extremely difficult in markets experiencing near-parabolic momentum.
Bloomberg Senior Commodity Strategist, Mr Mike McGlone, compared the current rally to the sharp price spikes seen in 1979 and 1980, which were followed by a major collapse.
“Momentum suggests $100 is achievable, but if silver lives up to its reputation as the ‘devil’s metal,’ prices could quickly fall back toward $50 and mark a long-term top,” Mr McGlone said.
Other metals are also enjoying strong gains. Platinum hit fresh highs on Friday and is up 36 percent this year, while copper climbed to a record above $13,000 per ton in London.
Overall, gold and silver continue to reach new records as investors seek safety in precious metals amid geopolitical uncertainty and expectations of further interest rate cuts.
