Why are gold and silver prices hitting record highs?
The surge in gold prices has coincided with a depreciation in the value of the U.S. dollar.
SEATTLE (Scrap Monster): The prices of gold and silver hit record highs on Monday, extending a banner year for the precious metals.
Gold has risen 10% over the past month and nearly 70% in 2025. As of midday Monday, the price of gold topped $4,470 per ounce.
Silver bested its amber counterpart over that span, jumping almost 40% over the last month and 134% this year.
Heightened geopolitical and economic uncertainty have boosted demand for gold and silver, which typically display a degree of independence from movements in stock prices, some analysts told ABC News. Volatility in bond markets and a devaluation of the U.S. dollar, meanwhile, have unsettled alternative assets typically viewed as safe-haven investments.
“These price moves have made history,” Jim Wyckoff, senior market analyst at Kitco Metals, told ABC News.
However, gold and silver prices carry volatility of their own, especially when buyers enter the market at a high point, risking losses instead of providing a security blanket, some analysts said.
“Raw commodity markets go through boom and bust cycles,” Wyckoff added. “We’re in a boom cycle for gold and silver.”
The run-up in gold and silver has come amid a wobbly moment for the economy and persistent global unrest.
The labor market has slowed in recent months, while inflation has hovered nearly a percentage point higher than the Federal Reserve’s target rate of 2%. Meanwhile, geopolitical conflict looms amid escalating U.S. pressure on Venezuela as well as tit-for-tat attacks between Russia and Ukraine, Wyckoff said.
Precious metals are widely viewed as a hedge against geopolitical unrest because the millennia-old stores of value are perceived as investments that could outlive calamity.
“That’s the catalyst that has pushed gold prices higher,” Wycoff added.
The flight to gold in moments of market turbulence draws on decades of evidence, according to an analysis co-authored in 2020 by Campbell Harvey, a professor at Duke's Fuqua School of Business who studies commodity prices. The price of gold moved higher during seven of the last nine major stock market selloffs stretching back to the late 1980s, researchers found.
The surge in gold prices has coincided with a depreciation in the value of the U.S. dollar. Its value against other currencies plunged about 11% over the first half of 2025, the biggest decline in more than 50 years, a Morgan Stanley report in August found.
The decline in the U.S. dollar's value reflects a shift away from global dependence on the dollar as a global reserve currency, as investors take note of changes in U.S. economic policy and Trump's pressure campaign against the Fed, some analysts said.
“Many investors and institutions around the world are looking for an alternative defensive asset,” Harvey told ABC News. “Many of those investors realize they are significantly underinvested in gold.”
Wyckoff acknowledged the current price boom may eventually lose steam, but underscored the difficulty of forecasting the near-term outlook.
“We’re probably in the 8th or 9th inning of this boom cycle in the gold and silver markets,” he said. “Even if we’re in the 8th or 9th inning, a lot of runs could still be scored.”
He added, “We don’t know where prices are going to go in the next few weeks or months.”
Courtesy: www.abcnews.com