Gold & Silver Hit Record Highs Amidst Global Chaos

Gold and silver prices soared on January 26, achieving record highs as global markets reacted to heightened geopolitical risks and economic uncertainty. Gold surpassed the significant $5,000 per ounce threshold, while silver experienced a notable increase of over 5%.

This surge is attributed to a confluence of factors, including ongoing conflicts in Ukraine and Gaza, and trade policy uncertainties stemming from actions by the US. These events have amplified investor concerns and driven a demand for safe-haven assets.

Broader macroeconomic trends, such as inflation, a weakening US dollar, and expected interest rate cuts by the US Federal Reserve, have further bolstered the appeal of precious metals. Central banks have also contributed by increasing their gold reserves, diversifying away from traditional currencies.

Silver's rise is partly due to its status as a by-product of base metal mining, making its supply inelastic. While its current rally is linked to reflation expectations, future growth depends on sustained industrial demand, particularly in sectors like solar power and electric vehicles.

Anand Rathi highlighted gold's evolving role from an inflation hedge to geopolitical insurance, emphasizing its function in protecting balance sheets during stressful market periods. Silver, though more volatile, is seen as attractive for tactical allocations rather than as a defensive hedge.