Gold surged to a new peak on Wednesday, lifted by softer US inflation data that strengthened expectations of rate cuts and pushed investors toward safe havens. Silver also broke historic ground, crossing the 90-dollar level for the first time.
Spot gold gained 1 per cent to reach $4,632 an ounce by 0715 GMT, after setting a fresh record earlier in the session. US gold futures were also higher at $4,639. Silver outpaced gold with a sharp 3.6 per cent jump to $90.11, extending its rally to almost 27 per cent this year.
Analysts say the latest US Consumer Price Index reading, which came in cooler than expected at 2.6 per cent, set the tone. The softer data boosted hopes for a benign producer inflation print, keeping the path open for monetary easing.
Tim Waterer, chief market analyst at KCM Trade, noted that risk markets are watching the inflation trend closely, hoping it gives the Federal Reserve enough room to start trimming interest rates.
The US core CPI rose 0.2 per cent month on month in December, undershooting forecasts. Core PPI data is due later in the day and could add more clues about the Fed’s next steps.
President Donald Trump welcomed the inflation numbers and repeated his call for decisive rate cuts. Meanwhile, central bankers and Wall Street chiefs lined up in support of Fed Chair Jerome Powell after the administration opened an investigation into him. The move triggered criticism from former Fed leaders and raised questions about trust in US institutions, which investors say is adding to the demand for gold.
Markets are now pricing in two quarter-point rate cuts this year, with the earliest expected in June. A lower rate environment typically strengthens the appeal of non-yielding assets like gold.
ANZ said it expects gold to trade above $5,000 in the first half of 2026. In the silver market, analysts say the next psychological barrier is $100, with strong double-digit gains likely.
Equity markets were weaker on Tuesday. The Dow fell nearly 0.8 per cent, while the S&P 500 and Nasdaq slipped slightly.
In other precious metals, platinum rose 2.7 per cent to $2,386 after touching a one-week high and remains close to record levels set in late December. Palladium edged up 0.8 per cent to $1,854.