Precious metals race into the New Year! Gold and silver both strengthen - a market trend demonstrating the allure of safe-haven assets

Background Catalysts: Multiple Factors Driving Precious Metals Higher

As the year-end sprint begins, the international precious metals market is experiencing a strong rally. According to Bloomberg reports, this week during Asian trading hours, spot gold and silver prices rose simultaneously, with silver reaching a historic high, highlighting market demand for safe-haven assets.

There are two main drivers behind this upward trend: first, expectations of adjustments in Federal Reserve monetary policy, with traders generally anticipating two rate cuts by 2026. The easing outlook provides a substantial positive for gold and silver, which do not generate interest income; second, escalating global geopolitical risks, including increased U.S. oil sanctions on Venezuela and ongoing tensions from the attack on Russian “shadow fleet” tankers in the Mediterranean by Ukraine, have reinforced the importance of precious metals’ safe-haven function.

Market Snapshot: Dual Metal Resonance Creates New Highs

On Monday during Asian trading hours, spot gold surged strongly, with an intraday increase of $33, currently trading around $4,372 per ounce, just a step away from the October high of $4,381 per ounce. Meanwhile, silver performed even more impressively, rising 1.3% in a single day to close at $68.05 per ounce, setting a new record high.

Silver’s robust performance warrants attention. Since the supply-tightening “short squeeze” in October, speculative funds have continued to flood into the precious metals market, with supply-side bottlenecks remaining unresolved. Trading volume for Shanghai silver futures contracts earlier this month soared to levels seen during the supply crunch two months ago, reflecting a sharp increase in market participation.

Annual Performance: Precious Metals Achieve Nearly 45-Year Best Results

2024 has been a fruitful year for precious metal investors. So far, silver prices have more than doubled since the beginning of the year, while gold has gained about two-thirds, both on track to record their strongest annual gains since 1979. Behind this achievement are persistent central bank purchases worldwide and large capital inflows into physically-backed exchange-traded funds (ETFs).

According to Bloomberg data, gold ETFs have seen five consecutive weeks of net inflows; data from the World Gold Council further shows that, except for May, holdings in these funds have increased month-over-month this year. Continuous investor interest has laid a solid foundation for the metals’ strong performance throughout the year.

Institutional Outlook: Continued Bullish Sentiment Next Year, Target at $4,900

Goldman Sachs analysts recently issued a report stating that gold still has room to rise into 2026. Under the baseline scenario, Goldman sets a target price of $4,900 per ounce, emphasizing that the upside risks are relatively greater. Analysts note that as ETF investors and global central banks compete for limited physical gold supplies, this structural supply tightness is expected to persist and support gold prices.

Technical Analysis: Clear Breakout Roadmap

From a technical perspective, FXStreet analysts point out that the key to short-term gold trends lies in whether it can continue breaking through the historic high. If the price surpasses the $4,381 resistance and stabilizes above $4,400, an upward move toward $4,450–$4,500 could be initiated.

Conversely, if prices fall back below $4,300, traders may test the December 11 high of $4,285, followed by attention to the psychological levels at $4,250 and $4,200.

Overall, the precious metals market has formed an upward resonance driven by multiple positive catalysts—be it fundamental support from central banks, policy expectations of rate cuts, or geopolitical safe-haven demand—providing solid backing for gold and silver. Under the background of the market’s end-of-year rally, this bullish momentum is expected to continue.