PRECIOUS-Gold, silver notch record highs on safe-haven demand, Fed rate-cut bets

Reuters
2026.01.12 01:49

Gold and silver prices reached record highs due to safe-haven demand amid geopolitical tensions and expectations of U.S. interest rate cuts. Gold surpassed $4,600 per ounce, while silver hit $83.96. The Federal Reserve is anticipated to cut rates, influenced by a slowing job market and economic uncertainties. HSBC predicts gold could rise to $5,000 an ounce by mid-2026. Other precious metals like platinum and palladium also saw significant gains.

Jan 12 (Reuters) - Gold broke through $4,600/ounce for the first time on Monday, while silver also jumped to an all-time high, bolstered by geopolitical and economic uncertainties and growing bets of U.S. interest rate cuts.

FUNDAMENTALS

  • Spot gold (XAU=) was up 1.5% at $4,478.79 per ounce, as of 0127 GMT. Bullion hit a record high of $4,600.33 earlier in the session.

  • U.S. gold futures (GCcv1) for February delivery firmed 2% to $4,591.10.

  • Unrest in Iran has killed more than 500 people, a rights group said on Sunday, as Tehran threatened to target U.S. military bases if President Donald Trump carries out his renewed threats to strike the country on behalf of protesters.

  • Iran’s unrest comes as Trump flexes U.S. muscles internationally, having ousted Venezuelan President Nicolas Maduro, and discussing acquiring Greenland by purchase or force.

  • U.S. employment growth slowed more than expected in December, data showed on Friday, amid job losses in the construction, retail and manufacturing sectors.

  • However, a decline in the unemployment rate suggested the labour market was not rapidly deteriorating.

  • Investors currently expect at least two Federal Reserve rate cuts this year. A softer job market makes rate cuts more likely. (FEDWATCH)

  • Fed Chair Jerome Powell said on Sunday the Trump administration had threatened him with a criminal indictment and served grand jury subpoenas over Congressional testimony he gave last summer regarding a Fed building renovation project, an action Powell called a “pretext” aimed at putting further pressure on the central bank to lower rates.

  • Non-yielding assets tend to do well in a low-interest-rate environment and during geopolitical or economic uncertainties.

  • Gold prices could rise to $5,000 an ounce in the first half of 2026 on rising geopolitical risks and debt, HSBC said.

  • Spot silver (XAG=) rose 4.4% to $83.50 per ounce after hitting an all-time high of $83.96 earlier in the day.

  • Spot platinum (XPT=) added 2.9% to $2,338.54 per ounce after scaling a record peak of $2,478.50 on December 29.

  • Palladium (XPD=) gained 4.2% to $1,892.18 per ounce.

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