Gold prices surged to a new all-time high on Monday as investors grew increasingly confident that the US Federal Reserve will continue cutting interest rates into next year, driven by signs of a weakening labour market and easing inflation pressures.
The precious metal climbed to $4,383.76 per ounce in early trading, surpassing its previous record of $4,381.52 set in October. The rally followed a series of US economic indicators released last week that strengthened expectations of further monetary easing by the Federal Reserve.
Silver also joined the rally, with spot prices jumping 2.7 percent to a historic high of $69.23 per ounce.
Gold has now gained an impressive 67 percent year-to-date, breaking multiple records and crossing the $3,000 and $4,000 per-ounce milestones for the first time. The metal is on track for its strongest annual performance since 1979.
Silver has outperformed gold by a wide margin, surging 138 percent so far this year, supported by strong investment demand and ongoing supply constraints.
Commenting on the rally, Matt Simpson, senior analyst at StoneX, said December has historically delivered positive returns for precious metals. However, he cautioned that with gold already up around 4 percent this month and year-end approaching, thinner trading volumes could increase the risk of profit-taking.
Gold’s rise has also been reinforced by its safe-haven appeal amid geopolitical and trade tensions, steady purchases by central banks, and expectations of lower interest rates in the coming year. A softer US dollar has further supported prices by making gold cheaper for overseas buyers.
Markets are currently pricing in two US interest rate cuts next year, despite the Federal Reserve maintaining a cautious policy stance. Non-yielding assets such as gold typically benefit in a low interest rate environment.
Simpson added that expectations of further rate cuts in 2026, combined with a faster slowdown in US employment and a more dovish Fed, could provide additional upside for gold prices.
Elsewhere in the precious metals market, platinum jumped 4.1 percent to $2,054.25 per ounce, its highest level in more than 17 years, while palladium rose 4 percent to $1,781.32, nearing a three-year high.
