Precious metals suddenly surge! Gold breaks through the $4,372 mark, and the truth behind silver reaching a historic high

On December 22nd during Asian trading hours, spot gold prices accelerated their upward movement, sharply breaking through $4,372 per ounce, with a single-day increase of $33. Meanwhile, silver also showed no signs of weakness, hitting a record high of $68.05 per ounce, up by 1.3%. What is hidden behind this fierce surge?

Why are precious metals so hot right now?

Reignited expectations of Fed rate cuts

Earlier this week, after releasing multiple economic data points, market expectations for the Federal Reserve’s policy direction adjusted. Traders generally bet that the Fed will implement two rate cuts by 2026. The loose monetary policy environment is highly favorable for non-yielding assets like gold and silver—when interest rates decline, the opportunity cost of holding precious metals decreases, naturally attracting capital inflows.

Geopolitical tensions boost safe-haven demand

Rising global political risks are also pushing up precious metals. The US has escalated its oil embargo measures against Venezuela, and Ukraine has expanded military operations against Russia’s “shadow fleet” into the Mediterranean—these events are strengthening market risk aversion sentiment, driving funds into traditional safe assets like gold and silver.

Supply-side pressure and capital inflows form a combined force

Regarding silver, after the “short squeeze” rally in October, speculative funds continued to flow in net, but spot supply remains tight. The trading volume of Shanghai silver futures has approached levels seen during the tight supply period two months ago, indicating that market demand for silver remains hot.

In the gold sector, continuous central bank purchases and significant ETF inflows have become key drivers. Gold ETFs have recorded net inflows for five consecutive weeks. According to the World Gold Council, excluding May, the total holdings of these funds have increased month by month this year. Central banks in Australia and other regions are also increasing their holdings, further supporting gold prices.

What miracles have precious metals created this year?

The data speaks for itself: gold has gained nearly two-thirds over the year, and silver has more than doubled—this is the strongest annual performance since 1979. Goldman Sachs’ analysis team expects this rally to continue, with a baseline target price of $4,900 per ounce, and sees greater upside risks.

What does technical analysis say?

Gold is currently at $4,372 per ounce, just a step away from the October high of $4,381. Technical analyst Christian Borjon Valencia pointed out:

Bullish scenario: If gold successfully breaks through the October high of $4,381, it will open up further upside potential. The first target after breaking through is $4,400, followed by $4,450 and $4,500.

Risk warning: On the downside, if gold falls below the support at $4,300, traders may test the December 11 high of $4,285, and then the psychological levels at $4,250 and $4,200 need to be defended.

Currently, gold prices are at a critical juncture—whether to break out or pull back depends on the next one or two candlesticks.