Gold Breaks Hits Record High as US-Venezuela Crisis Fuels Safe-Haven Rush

TLDR

• Gold prices hit a record high above $4,500 per ounce on Tuesday, marking the 50th all-time high in 2025
• Silver more than doubled in 2025, topping $69 per ounce with both metals tracking toward their best year since 1979
• US-Venezuela tensions and Iran missile drills drove safe-haven demand for precious metals
• Central bank purchases, weaker dollar, and lower interest rate expectations supported the rally
• Goldman Sachs set a $4,900 gold price target by end of 2026, while some analysts warn of potential corrections

Gold prices broke above $4,500 per ounce on Tuesday, setting another record during a year that has seen the precious metal reach 50 all-time highs. Spot gold traded 0.8% higher at $4,481.02 per ounce after touching $4,497.82 earlier in the day.

Silver continued its strong performance, rising over 0.6% to trade near $69.49 per ounce. The metal has more than doubled since January, outpacing gold’s 70% year-to-date rally.

Both precious metals are on track to deliver their largest annual gain since 1979. Platinum climbed 2.2% to $2,176.78 per ounce, reaching an over 17-year peak.

The latest surge came as tensions escalated between the United States and Venezuela. The US navy attempted to seize a third oil tanker linked to Venezuela. President Trump warned of a potential naval offensive against Caracas and President Nicolas Maduro.

Trump also said the US will keep oil from Chinese tankers seized off the coast of Venezuela. These geopolitical tensions drove investors toward safe-haven assets like gold and silver.

Geopolitical Tensions Drive Demand

Iran running a missile drill added to Middle East tensions. Reports indicated Israel planned to brief Washington on potential strikes against Tehran. These developments increased demand for precious metals as protective assets.

Thin trading volumes during the year-end holidays magnified price moves across the metals market. Palladium jumped 3.5% to $1,834.57 per ounce.

Last week’s US consumer price index came in below expectations. This reinforced market expectations that the Federal Reserve will deliver multiple rate cuts in 2026. Lower interest rates reduce the opportunity cost of holding non-yielding bullion.

A weaker US dollar and subdued Treasury yields contributed to bullion’s strength. Investors rebalanced portfolios toward defensive positions ahead of the holidays.

Central Banks Support Rally

Shree Kargutkar, senior portfolio manager at Sprott Asset Management, said gold is being viewed as a currency rather than a commodity. Central bank hoarding, exchange-traded fund purchases, and falling interest rates served as major tailwinds.

President Trump is expected to announce his pick to replace Federal Reserve Chair Jerome Powell, whose term ends in May. This raises expectations for dovish Fed policy that could boost prices further.

Goldman Sachs maintains a “structurally bullish” outlook with a price target of $4,900 by the end of 2026. UBS expects gold to reach $4,500 by June 2026, driven by lower real yields and continued dollar weakness.

The World Gold Council suggests fiscal spending, central bank demand, and lower rates could push prices up another 5% to 15% next year. Joe Cavatoni, senior market strategist at World Gold Council, said gold could see moderate gains if economic growth slows and interest rates continue to fall.

However, Mike McGlone, senior commodity strategist at Bloomberg Intelligence, urged caution. He noted gold can easily reach $5,000 but could also fall to $3,500. McGlone pointed to gold’s rally in 1979 and subsequent plunge of more than 50% by 1982.

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