Gold and other precious metals are surging to record highs as the year draws to a close, driven by a mix of geopolitical uncertainty, a weaker US dollar, strong industrial demand and tight supply, according to an AFP analysis.
Gold and silver have traditionally been viewed as safe-haven assets, and demand has jumped sharply amid rising global tensions. These include wars in Ukraine and Gaza, uncertainty linked to US President Donald Trump’s trade policies, and growing pressure by Washington on Venezuela. Investors are also increasingly concerned about swelling public debt in major economies and fears of a potential bubble in the artificial intelligence sector.
Analysts say such uncertainty is prompting investors to treat metals as a form of insurance rather than purely speculative assets. As a result, demand for gold and silver has intensified, with other metals also benefiting as investors diversify their portfolios.
Another major driver has been the weakening of the US dollar. Traditional safe havens such as the dollar and US Treasuries have lost some appeal this year amid expectations of further Federal Reserve interest rate cuts and uncertainty surrounding US economic policy. A softer dollar makes dollar-priced commodities cheaper for international buyers, boosting demand for gold, silver and industrial metals.
Gold has climbed more than 70 per cent this year, crossing $4,500 an ounce for the first time, while silver has hit record levels after prices more than doubled since January.
Industrial demand has also surged, particularly due to the expansion of artificial intelligence and the global energy transition. Copper prices have reached record highs on strong demand for use in renewable energy systems, electric vehicles and data centres, with aluminium and silver also benefiting from these trends.
Tight supply has further fuelled the rally. Concerns over potential US tariffs, mine disruptions in key producing countries and thin year-end trading have added to price volatility, pushing metals to historic highs.