Gold and silver surged to record highs as concerns about US credit quality and escalating tensions between Washington and Beijing drove demand for safe-haven assets.
Gold prices climbed as much as 1.2% to reach $4,379.93 per ounce before retracting some gains, positioning the metal for its largest weekly increase since 2020, continuing a sharp rally that started in August. This rise was bolstered by expectations that the Federal Reserve might introduce significant interest rate cuts later this year, which has had a ripple effect on other precious metals.
Silver broke through its previous all-time peak, surpassing the record set in 1980, as prices reached a new high of $54.3775 per ounce on Friday, before experiencing a slight pullback. Although palladium and platinum both declined, they remained on track for substantial weekly gains.
Markets were unsettled on Thursday following disclosures from two regional US lenders about loan problems linked to allegations of fraud, raising concerns about borrowers’ creditworthiness. This turmoil came shortly after the intensification of the US-China trade conflict, further compounded by a lack of economic data due to a government shutdown in Washington. The overall uncertainty heightened demand for safe-haven investments.
Traders are increasingly betting on a substantial rate cut from the Fed by the end of the year, while Fed Chair Jerome Powell hinted earlier this week at another quarter-point reduction this month. Such a move would favor precious metals, which do not offer interest.
On Thursday, China’s Commerce Minister Wang Wentao attributed the worsening tensions to the United States, cautioning against economic decoupling. This followed pointed remarks from US Treasury Secretary Scott Bessent, who criticized a Chinese trade official.
Gold has appreciated approximately 65% this year, driven by central bank purchases, inflows into exchange-traded funds, and a surge in demand for safe assets due to geopolitical and trade stresses, rising government spending and debt, and challenges to the Fed’s independence from the Trump administration.
Silver has outperformed, increasing nearly 87% in 2025, bolstered by similar macroeconomic factors affecting gold. A significant squeeze in London has created a global search for silver, as the benchmark prices there exceeded those in New York.
In the past week, over 15 million ounces of silver have been withdrawn from warehouses associated with the Comex futures exchange in New York, likely destined for London, where it may alleviate tightness in supply. The price spread between the two trading locations remains notably broad at $1.10 per ounce, although it has narrowed compared to last week’s spread, which reached as high as $3. Silver was down 0.5% on Friday at 11:02 AM in Singapore but remained up over 7% for the week.
Spot gold was up 0.4% to $4,341.07 per ounce, indicating a weekly gain exceeding 8%. Platinum has risen 6.8% for the week and palladium has surged by 15%. The Bloomberg Dollar Spot Index was mostly stable.
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Published on October 17, 2025.
