Gold Trades Above $4,600 as US Inflation Data Supports Precious Metals Rally
Gold traded above $4,600 per ounce after reaching a record high of $4,634.55, supported by weaker US inflation data that strengthened rate cut expectations. Silver hit a record above $89 per ounce, continuing its exceptional performance with nearly 150% gains last year. Geopolitical tensions and concerns about Federal Reserve independence have boosted haven demand for precious metals.
*this image is generated using AI for illustrative purposes only.
Gold maintained its position above $4,600 per ounce on Wednesday, building on momentum from reaching an all-time peak of $4,634.55 in the previous session. The precious metal's strength was underpinned by weaker-than-expected US inflation data for December, which reinforced expectations for potential interest rate cuts.
Market Performance and Key Levels
The latest trading data shows strong performance across precious metals:
| Metal | Current Price | Change | Notable Achievement |
|---|---|---|---|
| Spot Gold | $4,606.45 | +0.4% | Near record high of $4,634.55 |
| Silver | $88.24 | +1.5% | Hit record above $89 on Tuesday |
| Platinum | Not specified | Advanced | Positive momentum |
| Palladium | Not specified | Advanced | Positive momentum |
The Bloomberg Dollar Spot Index remained flat after rising 0.2% on Tuesday, providing a neutral backdrop for precious metals trading.
Inflation Data and Federal Reserve Developments
December's underlying inflation data came in lower than feared, although economists noted the figures may have been artificially depressed by the record-long government shutdown late last year. This development has strengthened the case for more interest rate cuts, providing fundamental support for gold prices.
Adding to market uncertainty, the prospect of a criminal indictment against Federal Reserve Chair Jerome Powell has revived concerns about the monetary authority's independence. Central bankers worldwide have rallied behind Powell, while JPMorgan Chase & Co. Chief Executive Officer Jamie Dimon warned that political intervention could backfire.
Geopolitical Factors Driving Haven Demand
Several geopolitical developments have contributed to increased haven demand for precious metals:
- US President Donald Trump's capture of Venezuela's leader
- Renewed threats to take Greenland
- Violent protests in Iran that could potentially lead to regime change
These factors have reinforced gold's traditional role as a safe-haven asset during periods of global uncertainty.
Silver's Outstanding Performance
Silver has demonstrated exceptional strength, outperforming gold with an almost 150% surge last year. The white metal's remarkable performance was driven by a short squeeze in October and persistent supply tightness in London. After reaching a record high above $89 per ounce on Tuesday, silver pared some gains but maintained strong momentum.
Analyst Outlook
Citigroup Inc. analysts have upgraded their forecasts this week, setting ambitious targets for precious metals over the next three months:
| Metal | New Target Price |
|---|---|
| Gold | $5,000 per ounce |
| Silver | $100 per ounce |
Precious metals have made a strong start to 2026, continuing the blistering rallies experienced last year. The combination of monetary policy expectations, geopolitical tensions, and supply-demand dynamics continues to support the precious metals complex.
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