By: Economy Middle east

Gold prices shattered records on Wednesday, topping $4,500 per ounce amid a broader precious metals rally. Silver and platinum also hit all-time highs (silver is currently trading at $72.25), driven by geopolitical tensions, central bank policies, and supply constraints. 

Spot gold climbed above $4,500, building on a momentum that saw it reach $4,480.25 on December 23, up 0.80 percent daily and 8.33 percent monthly. This marked a 71.31 percent year-over-year gain, reflecting sustained bullish sentiment in contract-for-difference trading tied to benchmark markets. 

In the UAE, gold rates increased, with 24-carat gold rising by AED2.25 to AED542.00, while 22-carat and 21-carat gold climbed to AED502.00 and AED481.25, respectively. Additionally, 18-carat gold saw a slight increase of AED1.75, reaching AED412.50.

Silver soared to intraday peaks near $59.655 per ounce in early December, surpassing nominal highs from 1980 ($49.45) and 2011, fueled by tight physical supply and industrial demand. Platinum joined the surge, hitting records as investors sought safe-haven assets amid market volatility.

These levels further positioned gold for potential $5,000 forecasts from analysts, with late 2025 breakouts past $4,000 and peaks at $4,381 in October. 

Geopolitical uncertainty reignited demand, with UBS noting gold’s weekly gains as a hedge against global risks. Federal Reserve rate cuts—two 25-basis-point reductions in 2025, lowering the federal funds rate to 3.75 percent-4 percent—weakened the U.S. dollar, boosting affordability for international buyers. 

Structural fiscal imbalances, including U.S. debt and deficits, underpinned the trend, described as non-speculative by Sprott’s Paul Wong. Institutional demand and supply shortages amplified pressures, echoing historical bull markets but with deeper currency debasement concerns. 

Industrial boost

Also, industrial factors bolstered silver and platinum: rising demand in tech and auto sectors strained supplies, pushing prices higher. 

Moreover, gold’s path to $4,500 caps a multi-year ascent, with 2025’s late surge past key thresholds signaling a new phase. Inflation-adjusted comparisons show silver’s December peak as a nominal milestone, though past eras like 1980 hold purchasing-power weight when CPI-adjusted. 

Platinum’s record aligns with broader metal dynamics, where macro shifts and physical tightness converge. Year-to-date, gold’s 71 percent rise outpaces many assets, contrasting stock market highs amid economic divergence. 

Traders differentiated intraday highs from settlements, a nuance vital for historical records. Indian markets reflected global trends, with local gold rates updated daily amid festive demand. 

Analysts eye $5,000 gold if Fed easing persists into 2026, potentially tested at the December 9 meeting. Goldman Sachs scenarios highlight policy shifts and dollar erosion as catalysts.