Investors appear to be hedging a policy shift the central bank hasn’t acknowledged.

Key Points

You know something big is happening in the world when the price of gold is not only at record highs but is also on track to have its best yearly gains in 46 years.

As 2025 draws to a close, gold broke through the $4,500 mark for the first time, and despite some pullback from a 70% surge, the precious metal is still headed for a roughly 65% annual gain.

This is the strongest yearly advance for bullion since 1979. That year, the Iranian Revolution caused a spike in oil prices, and the Soviet Union invaded Afghanistan.

Back then, demand for gold, which investors turn to as a safe haven asset and a hedge against inflation, catapulted prices from $200 an ounce in 1978 to $850 an ounce in January 1980.

Recently, with the yellow metal having scored its best gains since that period, many market commentators have drawn parallels between the late 1970s and the present day.

On the one hand, an uncertain geopolitical backdrop — Iran and Afghanistan in the past; Ukraine, the Middle East, and Venezuela today — is boosting safe haven demand.

On the other hand, there is a weakening dollar.

Just as in the late 1970s, the greenback has sharply weakened. This makes dollar-denominated gold more attractive to holders of other currencies. Through the first half of 2025, the dollar (DXY) was down 10.6% against major currencies. That is its worst first-half performance since 1973. The greenback is expected to end 2025 about 9.5% lower.

But, and that’s reassuring for gold investors, what then happened in 1980 is very unlikely to happen in 2026.

A tough Fed stamped out inflation, and gold

Between 1980 and 1982, the Federal Reserve, led by its legendary Chairman Paul Volcker, used monetary tools to lift short-term interest rates to a historic high of 20%, effectively stamping out inflation — and U.S. economic growth.

Higher interest rates made U.S. Treasuries and assets very attractive. The dollar strengthened dramatically, and gold slumped back to about $300-$400 an ounce by 1982.

Volcker had been brought in to reverse nearly a decade of undisciplined U.S. monetary policy. This policy had seen inflation surge close to 8%, even before the 1979 oil shock.

Today, according to many market and economic observers, the Fed appears likely to do the opposite of what it did after 1979, signaling a potential policy contrast for 2026.

Sticky inflation, weak jobs and rate cuts

While inflation is not as high as it was in the late 1970s, it has proven ‘sticky,’ recently approaching 3% in early 2025 and remaining above the central bank’s 2% target, yet the Fed is shifting policy differently than it did in 1980.

Prompted by signs of a weak labor market, the Fed has cut short-term rates three times since September. Rates now range between 3.5% and 3.75%, the lowest level since 2022.

After the last move in December, Fed Chair Jerome Powell noted that the current rate is within the estimated neutral range, while the central bank will continue to observe economic developments.

Yet, according to Fed funds futures, the market still expects at least two quarter-point rate cuts next year.

These expectations partly reflect worries about the U.S. economy, which could justify further rate cuts.

Fed independence in Trump’s crosshairs

However, many observers have also noted that the Trump administration has made it clear it wants the next Fed chairman, due to replace Powell in May, to push aggressively for lower interest rates, regardless of the circumstances.

“There is no Volker-like figure in the offing,” notes Bart Melek, Global Head of Commodity Markets Strategy at TD Securities. “Instead, the [Fed] may be filled with relative doves come May 2026, who see the two percent inflation as a suggestion and not a hard target which must be reached at any cost.”

Expectations that the central bank’s independence may become compromised in May have already led to market distortions. Long-term interest rates have stayed higher than expected, even after the Fed began cutting rates in September.

“There’s nothing happening with rates going up out there that suggests concern about inflation in the long-term, or anything like that,” noted Chair Powell recently. “So why are rates going up? It has to be something else.”

Premium in bonds and in gold

BBVA Research and other analysts say long-term rates currently embed a ‘premium.’ This is due to uncertainty as the announcement of Powell’s successor approaches early next year.

Even perceived interference by the government in Fed policy-making could lead to higher long-term borrowing costs, BBVA says. This would defeat the Trump administration’s efforts to lower them.

In normal times, U.S. Treasuries are regarded as one of the safest and most reliable income-producing assets. Higher long-term Treasury yields directly compete with gold as an investment option.

But these are not normal times: According to analysts at the CPM Group, “reduced faith in the U.S. central bank’s independence already is and would continue to be very supportive of gold and silver investment demand.”

Annual gold returns then and now: 

Eric Winograd, chief U.S. economist at Alliance Bernstein, says higher inflation has often followed when central banks bend to political influence. He cites the 1970s, when the Fed followed President Nixon’s lead and cut rates. This sparked inflation that stuck throughout the rest of the decade.

If a similar scenario were to emerge in 2026, the dollar would lose some of its purchasing power and continue to slide, as investors would seek alternative assets.

“While assets like gold and cryptocurrencies are somewhat speculative, we think they would benefit if the Fed’s independence were threatened,” Winograd says. “Both are dollar alternatives and perceived to be effective inflation hedges.”

It remains to be seen which way the winds will blow for the U.S. economy and for the Fed in 2026. But one thing is for sure for gold investors: The economic and policy parallels are closer to those of the early 1970s than of 1979.

Read the full article HERE.

Despite year-end drops for gold and silver, both are still on pace for their biggest yearly percentage gains since 1979

Year-end turbulence was only modestly slowing the surge in silver, gold and copper in 2025, with the metals providing important ballast to portfolios as President Donald Trump’s tariffs rattled markets and a spending frenzy around artificial intelligence entered a new debt-funded chapter.

For the year, gold was up nearly 65% and silver was about 145% higher as of Wednesday, putting both on pace for their biggest annual percentage gains since 1979, according to Dow Jones Market Data based on the most-active metals contracts.

Copper’s roughly 40% jump this year, while slightly more modest, would still mark its largest yearly increase since 2009 and amount to more than double the S&P 500 index’s 17% gain so far this year.

The clamor around metals has stirred debate about potential bubbles forming in gold and silver that could end badly for investors, especially those arriving late to the party. Yet on the last trading day of 2025, all three metals were perched above their 50-day moving averages, a key technical level that can be a bullish signal for an asset’s price.

“Big picture, it means there’s a lot more buyers than sellers,” Sameer Samana, head of global equities and real assets at the Wells Fargo Investment Institute, said of the uptrend. “That has to do with the dollar weakness in the early part of 2025, plus, you could argue, a lot of uncertainty around how countries will manage their fiscal health going forward.”

The ICE U.S. dollar index a measure of the buck against a basket of rival currencies, booked its worst first half of the year since 1973, when Richard Nixon was president. It since has recouped some of its 2025 losses but was still 9.4% lower on the year through Wednesday, according to FactSet.

A turbo rally in silver

Unlike gold and silver, copper isn’t considered one of the world’s precious metals. Yet like silver, it was added to the U.S. Interior Department’s list of critical minerals this year, given its role in wiring, power generation and electrical transmissions, all which are essential to the AI buildout.

Recent bullishness helped silver gain more than 55% in the past three months alone, while copper shot up nearly 17%, gold rose 12.5% and the S&P 500 added 0.2% over the same span, according to FactSet data.

From a technical perspective, the most recent leg of the metals rally has pushed gold and silver above their 50-day moving averages for a relatively long 93 trading days through Wednesday, while copper was above that threshold for 25 trading days, according to Dow Jones Market Data based on most-active futures contracts.

That has happened only four other times for gold since 1993 and five other times for silver since 1982, according to Dow Jones Market Data. Shorter stretches of at least 25 days for copper have been fairly common in recent years.

While the past doesn’t predict the future, similarly long trading stretches above the 50-day moving average have tended to skew bullish for stocks and gold in the weeks and months that follow, while silver has been mixed and copper has seen most of its gains after the three-month mark.

Importantly, gold showed its resilience this year after equities sold off in April following Trump’s “liberation day” tariff announcement, which shocked investors and triggered an ugly reaction in the bond market.

“Fixed income sort of helped, but crypto also fell by the wayside, while gold held up,” Samana at Wells Fargo said. “Given the nature of the beast, you look at your last best hedge when markets sell off, and I think it’s fair to say that’s gold.”

Skepticism around inflation and whether it can be tamed next year, especially with tax breaks and the data-center boom likely to reaccelerate the economy, would likely work in favor of metals in 2026, Samana said.

Spending on AI infrastructure is also not expected to let up in the years ahead. The U.S. already has nearly 3,750 data centers, according to the Data Center Map, an industry research tool launched in 2007.

For every new data center, metals have a role in the process. “There’s copper for wiring and silver in a lot of chips,” Samana said. And at least globally, demands for power from data centers will mean harnessing alternative-energy sources, where silver has been playing a major role.

Read the full article HERE.

Key Points:

Platinum (XPL) prices have broken above the key level of $2,300, as years of hidden supply stress are now showing up in price action. At the same time, platinum’s demand base is growing due to stricter emissions standards and increased use of clean energy. In my view, this convergence indicates that platinum will be one of the most important metals in the next phase of the commodities cycle. This article presents macro drivers, technical confirmation, and related market signals that support the case for a continued surge in platinum prices.

Macro Drivers—Platinum Deficits and Investment Demand

Aboveground Stocks Collapse Triggers Price Breakout

Platinum was structurally short for the last three years. However, the prices broke record levels in 2025. The earlier deficits failed to spark a strong rally because there were still plenty of stocks above ground to feed the difference. That case is no longer valid as inventories are falling while supply lags demand. In 2025, the stocks had fallen to low levels. This fundamental change favours the bullish price trend for platinum.

On the other hand, investment demand is supporting the platinum prices in 2025. The US was displaced by China in 2025 as the largest investor market for platinum. The physical purchases of platinum have surged. In addition, strong market momentum and positive price action drove positive ETF flows.

According to the WPIC Q3 2025 report, there has been a dramatic change in the market dynamics. The data below shows that the overall demand for platinum increased by 28% YoY to 1,982 koz in Q3 2025. However, this growth covers up weaknesses in key industrial areas. Jewellery demand dropped 29% QoQ, while automotive demand declined 2% YoY and 8% QoQ. Moreover, the industrial use dropped 8% YoY, with the glass-related use declining by 30%.

Despite the weakness in the industrial and jewellery demand, the total investment demand bounced back dramatically from -64 koz in Q2 to +286 koz in Q3. This demand is due to new ETF purchases and heavy Chinese retail buying. Since the industrial demand is weak, investors are now driving platinum’s upside to sustain the rally.

Auto Sector Holds While Clean Energy Expands

The largest user of platinum is from the motor vehicle industry, which has been aided by the tightening of emission control laws in major markets. The engines require improved loadings of PGM. In the meantime, the rhythm of electrification is slower than its expectations as a consequence of the deficiency of even distribution of consumer uptake and weaker policy backing.

Consequently, combined platinum and palladium (XPD) demand will be broadly stable until 2030, according to WPIC. Platinum is also more flexible than palladium, as auto makers have used platinum in the past instead of palladium when the palladium price goes high. However, the current price trends and the supply chain risks limit the forceful short-term changes.

Platinum also benefits from new energy technologies that allow it to have valuable long-duration optionality. Platinum catalysts are critical to the production of green hydrogen and fuels. This importance aligns more with long-term decarbonization plans than with short-term cycles in vehicle demand. The chart below shows that the market size for green hydrogen will grow exponentially during the next few years.

Due to stabilised catalytic demand and strong emerging clean energy applications, platinum has numerous avenues of demand. All these factors narrow the risks of downside and strengthen its long-term macro position.

Platinum Technical Analysis – Phase 3 Super-Cycle Targets $3,000+

Platinum has confirmed a long-term breakout, which has started a new parabolic phase. According to the monthly chart, the price increased by more than 46% in December 2025 and became the first month to close above the historical level of $2,300. This breakout wraps up the consolidation, which started following the high of 2008 and validates the market in Phase 3 in the super-cycle.

Historically, platinum has traded in three-phase rallies. The first phase was formed in the late 1970s. The second phase shot the prices into 2008. The third phase is currently underway. This surge is supported by the significant breakout from the long-term cup and handle patterns and indicates further upside.

The chart below shows that the price has clearly broken out of the major resistance range of $1,700. This breakout triggered a bullish measured movement to aim at $2,300. However, the price shot more than $2300, which means that Platinum is on a parabolic trend. This parabolic trend was triggered in silver when the silver price broke the historic $50 ceiling.

The breakout from $2,300 indicates the immediate target of $3,000. However, depending on the current price action, platinum can continue to surge above $3,000 in 2026.

The major resistance of $2,300 has now become the support level. A successful retest of this level would open the door to a sustained increase in platinum prices.

The price action is supported by tight physical supply, backwardation on forward markets and ETF accumulation. The performance of platinum has been superior to that of palladium and has been leading the pack among the industrial metals. Therefore, the technical structure points to even higher levels in 2026.

Cross-Metal Signals from Gold, Silver, and the US Dollar

US Dollar Roll-Over Signals Strong Tailwind for Platinum

The chart below shows the correlation between the long-term trend in the US dollar index and platinum. The data shows significant inflection points in 1985, 2002 and 2022 that marked peaks in the US dollar index.

These peaks coincide with significant platinum bottoms. Platinum entered a major uptrend after every dollar peak. The recent platinum breakout is technically sound and macro supported, as evidenced by this cyclical correlation.

The platinum market shot up in 2025 when the dollar rolled over its long-term resistance. The movement of the prices validates a long-term breakout of the trendline support. Platinum has passed into a new bullish cycle as the dollar moves out of its cyclical high. The thesis is supported by the past three technically supported US dollar peaks. Moreover, the sharp increase in the prices of gold (XAU), silver (XAG), and platinum above historical levels indicates that the US dollar will likely drop in the next few weeks.

Platinum-to-Gold Ratio Breakout Signals Leadership Rotation

The platinum/gold ratio has come out of a 15-year downward trend channel. This is a significant change in market structure. Since 2008, resistance trapped the ratio, and every attempt to break the channel failed. However, the latest action above 0.50 proves a definite breakout. This breakout indicates that platinum may perform better than gold in the next cycle.

The ratio still remains significantly below parity, and the chances of mean reversion to the 1.0 level are still high. Traditionally, platinum was more valuable than gold; the existing change could be the first step towards returning to the old tradition.

Conclusion – Technical and Macro Forces Align for Higher Platinum in 2026

Platinum is now at phase 3 and is likely to skyrocket in 2026. The important drivers for this rally are structural deficits and tight physical supply. I think it is more than supply-demand imbalances that the 2025 parabolic trend represents. It is symptomatic of a greater change in the way the market is structured. The flow of investors and changes in global inventory are changing the price discovery.

The breakout of the $2,300 level in December 2025 was the final step in a multi-year base and triggered Phase 3 of the platinum super-cycle. The technical roadmap is pointing to a target level of $3,000 or higher. This bullish outlook remains valid as long as platinum holds above the key support levels at $2,170 and $2,300.

Read the full article HERE.

Gold staged a dramatic rally in 2025 as the US Trump administration’s unorthodox economic policies sent investors and central banks reaching for safe-haven assets. Right now, however, it’s silver that’s stealing the spotlight.

Surging investor demand collided with limited availability to catapult the price of silver above $80 a troy ounce at the end of December, almost triple its value a year earlier and enough to dwarf even gold’s meteoric rise of more than 70%.

Both precious metals have been experiencing a surge in demand from investors seeking to hedge against political turbulence, inflation and currency weakness. But unlike gold, silver has many properties that also make it a valuable ingredient in a range of industrial applications. Sustained high prices could erode the profitability of manufacturers that use it and spur efforts to substitute silver components for other metals.

Who needs silver?

Silver is an excellent electrical conductor that’s used in circuit boards and switches, electric vehicles and batteries. Silver paste is a critical ingredient in solar panels, and the metal is also used in coatings for medical devices.

Like gold, silver is still a popular ingredient for making jewelry and coins. China and India remain the top buyers of silver thanks to their vast industrial bases, large populations and the important role that silver jewelry continues to play as a store of value passed down the generations.

Governments and mints also consume large amounts of silver to produce bullion coins and other products. As a tradable asset, it’s much cheaper than gold per ounce, making it more accessible to retail investors, and its price tends to move more sharply during precious metal rallies.

What makes the silver market unique?

Silver’s varied uses mean its market price is influenced by a wide array of events including shifts in manufacturing cycles and interest rates and even renewable energy policy. When the global economy accelerates, industrial demand tends to push silver higher. When recessions loom, investors can step in as alternative buyers.

The market is thinner than that of gold. Daily turnover is smaller, inventories are tighter and liquidity can evaporate quickly. The silver stored in London is worth about $65 billion, while the gold is worth almost $1.3 trillion, though much of both are not available to borrow or buy for investors. For gold, the London market is underpinned by around $700 billion of bullion held mostly by the world’s central banks in vaults of the Bank of England. This can be lent out when a liquidity squeeze hits, effectively making the central banks lenders of last resort. No such reserve exists for silver.

Why did silver rally so much in 2025?

Silver often moves in tandem with gold, but with more violent price moves. A surge in gold in the early months of the year stretched the valuation gap between the two metals to the point where an ounce of gold could buy more than 100 times the same amount of silver. Some investors saw a potentially lucrative opportunity and piled in.

Heavy debt loads in major economies such as the US and France and a lack of political will to solve them also encouraged some investors to stock up on silver and other alternative assets, in a wider retreat from government bonds and currencies dubbed the debasement trade.

Meanwhile, global silver output has been constrained by declining ore grades and limited new project development. Mines in Mexico, Peru, and China — the top three producers — have all faced setbacks ranging from regulatory hurdles to environmental restrictions. Most of the world’s silver is extracted as a by-product from the mining of other metals.

Global demand for silver has outpaced the output from mines for five years in a row, while silver-backed exchange-traded funds have drawn in new investment.

What was there a silver squeeze in 2025?

Speculation early in the year that the US would levy tariffs on silver led to a flood of metal heading into vaults linked to the Comex commodities exchange in New York, as traders sought to take advantage of premium prices in that market.

This contributed to a dwindling of available silver stocks in London, the dominant spot trading hub. Those were further eroded as more than 100 million ounces flowed into ETFs backed by physical bullion.

With a spike in demand during the Indian festive season in October, the market suddenly seized up. The cost of borrowing silver surged to a record, while prices jumped.

London prices rose above other international benchmarks, eventually drawing more silver into the market and helping to ease the supply squeeze.

Traders were still monitoring for any potential US tariff on silver after the precious metal was added to the US Geological Survey’s list of critical minerals in November. The market remained febrile into December, with speculation of any new development triggering sharp price moves.

The metal broke above $80 on Dec. 26 amid concerns around Chinese silver export restrictions that were announced in late October, even though these were effectively a rollover of previous policies. The rally was fueled partly by billionaire entrepreneur Elon Musk, who responded to comments about the Chinese policy on social media platform X with his own post: “This is not good. Silver is needed in many industrial processes.”

Read the full story HERE.

Key Points

Bitcoin and other cryptocurrencies were little changed on Christmas Eve, with digital assets looking set to miss out on any Santa Claus rally that sweeps stock markets. One crypto skeptic suggests silver and gold could be to blame.

The price of Bitcoin fell less than 1% over the past 24 hours to $87,300. Bitcoin hit a record high above $126,000 in October but has since fallen back dramatically amid deteriorating sentiment for digital assets.

“Bitcoin is in a falling trend channel in the short term. This shows that investors over time have sold at lower prices to get out of the currency, and indicates negative development,” wrote investing platform Investtech on Wednesday, based on technical market indicators. “[Bitcoin] has support at points $84,000 and resistance at points $93,400 … technically negative for the short term.”

With few obvious catalysts ahead and a weak technical backdrop, cryptos seem unlikely to benefit significantly from sentiment that could buoy wider markets, such as the much-anticipated “Santa Claus rally” typically seen in stocks. The S&P 500 for its part, hit an all-time high on Tuesday, with precious metals also rallying as goldGC00-0.24% and silver set their own fresh records.

In fact, gains for gold and silverSLV-1.50% could be a contributing factor to Bitcoin’s weakness, according to research published Tuesday by Walter J. Zimmerman Jr. of ICAP Technical Analysis.

Citing price trends and evidence of fund flows, Zimmerman suggests that investors have rotated out of Bitcoin and into precious metals. Bitcoin has fallen by more than a third since its peak on October 6, while gold has risen 15% to historic highs over that same period with silver similarly setting records with a 50% jump on the same timeline.

“[These] trends … are causally connected,” wrote Zimmerman. “We are looking at fund flows out of Bitcoin and into gold and silver.”

Beyond Bitcoin, Ethereum —the second-largest crypto—fell 1.5% to below $3,000. Smaller tokens or altcoins were also weaker, with XRP retreating 1.5%, Solana sliding 2%, and Dogecoin down 2%.

Read the full article HERE.

・Gold futures for February 2026 deliveries jumped 1% to $4,515.2 an ounce.

・Silver futures for March 2026 deliveries were up 0.8% at $69.6 an ounce.

・Silver, in particular, has rallied strongly in December, hitting new highs 11 times in the month.

Precious metals are closing the year on a powerful note, as rising investor anxiety over policy, deficits, and inflation sent gold and silver surging to fresh all-time highs on Tuesday.

Spot gold (XAUUSD) rose to $4,497.69 an ounce, while spot silver (XAGUSD), which has been on a record-breaking run in December, nearly breached the $70 mark for the first time. Gold futures for February 2026 deliveries jumped 1% to $4,515.2 an ounce, while silver futures for March 2026 deliveries were up 0.8% at $69.6 an ounce.

Spot silver’s rally has seen the precious metal hit new highs 11 times in December alone.

Yardeni Forecasts $6,000 An Ounce

Yardeni Research reportedly raised its gold outlook on Monday, saying the sharp rally across precious metals reflects mounting macroeconomic and policy concerns rather than a rebound in global growth.

Gold prices are up about 69%, but gains in silver, platinum, and palladium have been even stronger, weakening the argument that industrial demand is driving the move. Yardeni noted that basic metals, which are closely tied to manufacturing, have lagged significantly.

While central bank buying helped fuel gold’s breakout above $2,000 an ounce in early 2024, the surge in other precious metals points to broader investor unease. The firm warned that an overly stimulative mix of U.S. monetary and fiscal policy could pressure bond yields, prompting it to raise its year-end 2026 gold target to $6,000 an ounce.

In an interview with CNBC-TV18 on Monday, Yardeni said that gold could climb up to $10,000 by the end of 2029.

Earlier this month, J.P. Morgan Global Research forecast prices to average $5,055 an ounce by the final quarter of 2026, rising toward $5,400 an ounce by the end of 2027.

“While this rally in gold has not, and will not, be linear, we believe the trends driving this rebasing higher in gold prices are not exhausted. The long-term trend of official reserve and investor diversification into gold has further to run. We expect gold demand to push prices toward $5,000/oz by year-end 2026,” said Natasha Kaneva, head of Global Commodities Strategy at J.P. Morgan.

How Have The ETFs Done?

SPDR Gold (GLD) was up around 1% in premarket trading on Tuesday. It is on track to open at an all-time high.

Retail sentiment on Stocktwits remained ‘bullish’ over the past 24 hours, amid ‘extremely high’ message volumes. Its YTD gains stand at 67%.

Meanwhile, iShares Silver Trust (SLV) was also up 1% in premarket, but its 2025 gains are nearly double GLD’s at 133%.

Retail sentiment for SLV on the platform remained ‘bullish’ amid ‘high’ message volumes.

Read the full article HERE.

The gold price has hit another record high, trading above $4,400 (£3,275) an ounce for the first time.

The price of the precious metal has risen on expectations the US central bank will cut interest rates further next year, analysts said.

Gold started the year worth $2,600 an ounce, but geopolitical tensions, the Trump tariffs and expectations of rate cuts have added to investor demand for safe haven assets, such as gold and other commodities.

The prices of other precious metals also rose on Monday, with silver hitting a record high as well.

The gold price has risen more than 68% this year, the highest increase since 1979, according to Adrian Ash, director of research at gold bullion marketplace BullionVault.

2025 has seen “slow-burning trends around interest rates, around war and trade tensions”, Mr Ash said, which have helped to push up the price of gold.

“The precious metals market says that President Trump has really triggered something – and gold has gone crazy this year.

“You’ve got the trade war, the attacks on the US Federal Reserve and you’ve got geopolitical tensions, all of those provocations come from Trump,” he said.

After passing the $4,400 an ounce mark on Monday, the spot price of gold hit a high of $4,426.66.

Lower interest rate expectations typically mean lower returns for investments such as bonds, so investors look to commodities such as gold and silver to get a return, but also diversify their portfolios.

The consensus among analysts currently is that the US will lower interest rates twice in 2026.

Another factor adding to demand is that central banks globally are expanding their own physical holdings of gold as a way to counter economic turbulence, reduce reliance on the US dollar, and diversify their own portfolios, according to analysis from Goldman Sachs, which predicted the pattern would continue in 2026.

The steady increase in the price of gold across the year could be because it is seen as a way for traders to help shield themselves from the threat of inflation and economic turmoil, Anita Wright, chartered financial planner at Ribble Wealth Management, said.

“When confidence in financial assets and policy stability starts to wobble, gold tends to respond first as the primary monetary metal,” Ms Wright said.

A weaker US dollar has also helped push gold prices higher by making the metal cheaper for overseas buyers.

Other precious metals have also had record years. The price of silver also hit a record of $69.44 an ounce on Monday.

For 2025 so far, silver is up 138% year-to-date and platinum is at a 17-year high, vastly outperforming gold, underpinned by strong and supply constraints, according to analysts.

Unlike gold, the other precious metals are also used widely in industrial manufacturing which helps stoke demand.

Separately, oil prices rose on Monday, after the US ordered a “blockade” last week of sanctioned oil tankers entering and leaving Venezuela.

The price of Brent crude rose $1.31 to $61.78 a barrel, while US oil was up $1.25 at $57.77. However, both measures look set to end 2025 at prices lower than where they started the year.

Read the full article HERE.

Inflation has been top-of-mind for years. That could change.

President Trump is clearly frustrated by all the talk of an “affordability crisis.” I don’t blame him. As Thursday’s admittedly distorted consumer-price index report showed, inflation simply isn’t behaving badly.

But don’t define affordability too narrowly. It means not just the prices we pay, but the means to pay them. We may be focusing too much on the first and not enough on the second.

The inflation report was part of a deluge of data released this week, with a delay caused by the federal government shutdown. It also showed unemployment rising, to a four-year high of 4.6% in November, and earnings growth slowing.

Sometimes unemployment rises because a recession is under way. This time, something else is going on. Business leaders I have talked to in recent months are broadly optimistic about growth and pessimistic about hiring, especially their own. As their attitudes percolate down, we could see job security supplant prices in the public’s hierarchy of anxiety.

Prices rose a lot after the pandemic and haven’t broadly fallen since Trump took office, his promises to the contrary notwithstanding. But they are rising pretty slowly. Thursday’s report showed the inflation rate fell to 2.7% in November, the lowest since July, while core inflation, which excludes food and energy, fell to its lowest since 2021.

That report almost certainly understated inflation because of workarounds by the Labor Department’s Bureau of Labor Statistics in response to the shutdown.

Nonetheless, based on the data, you can’t argue that inflation has gotten worse under Trump. Odds are that in the coming year it will get better.

Trump is clearly frustrated that the public hasn’t rewarded him for a pretty good economy, just as Joe Biden was a year ago when growth, unemployment and inflation were broadly similar.

That is because economic anxiety is holistic. People have a nagging feeling that the economy isn’t working for them. That has shown up as anger at the high price of groceries, then the shortage of housing and now health insurance. But part of the equation is the security of your income and that is where the job market comes in.

Unemployment’s rise has been gradual and the level is still moderate, yet fragility is amply evident beneath the surface. The number of people working part time who wanted to work more leapt to 5.5 million in November, and is now up 23% from a year earlier. Those unemployed for more than half a year rose to 1.9 million from 1.8 million in September and 1.65 million a year earlier. It may not be a recession, but for anyone trying to find a job, it is starting to feel recession-like.

Meanwhile, average hourly earnings in November were up just 3.5% from a year earlier, the lowest since 2019 if pandemic-distorted figures are excluded. Other data do show firmer growth. But with employers reluctant to hire and unemployment growing, the pressure on wages is likely downward.

The question is why. Economic growth has topped 3% in the second and third quarter, according to the latest estimates. Corporate profits are strong, and the stock market is near record highs.

The labor market is usually closely linked to the pulse of the overall economy. Yet in its latest survey, the Business Roundtable finds that more chief executives plan to cut than add jobs for the third straight quarter, the lowest three-quarter reading since the 2007-09 recession.

One reason for the disconnect between the job market and the broader economy is tariffs. Economists expected them to show up as rising prices for imports. In real life, though, inputs don’t always map neatly to outputs. To cope with higher costs, whether for tariffs, energy, taxes, or health insurance, a business owner looks at all options, which may mean trimming head count instead of raising prices. Maybe it isn’t a coincidence that payroll growth stepped down sharply in the spring, just as Trump’s biggest tariff increases took effect, while the effect on inflation has been muted.

If so, relief is on the way. Tariff rates have stabilized and may actually drop if the Supreme Court rules against some in the coming weeks.

Yet even if the tariff effect fades, other headwinds remain, mostly artificial intelligence. “In three years this has gone from being a novelty party gag to being embedded in all your hiring plans and production,” Federal Reserve governor Chris Waller told executives at an event hosted by Yale University’s School of Management on Wednesday. “The speed at which jobs are going away is what’s frightening, and we are not able to see the jobs that are coming [although] they will come.”

Trump has locked arms with the AI industry. Politically, that could be a liability. Surveys by the Edelman Trust Institute find users in the U.S. are twice as likely to say they reject as embrace the growing use of AI. By a similar margin, they don’t believe business leaders are being fully honest about the impact on jobs.

The conventional wisdom in Washington is that costs will be the dominant issue heading into next fall’s midterm elections. The latest trends on AI and job security hint that the conventional wisdom may have to change.

Read the full article HERE.

An economist has warned that the recent increase in America’s unemployment rate represents an especially concerning signal for the labor market and wider U.S. economy.

On X, Justin Wolfers, a professor of economics and public policy at the University of Michigan, said it was “hard to tell” whether the U.S. was already in an economic downturn, but pointed to the “Sahm Rule” as one concerning indicator.

This heuristic—employed by the Federal Reserve—charts early stage of recessions by whether the unemployment rate’s three-month moving average has risen 0.5 percent relative to the previous year’s minimum level.

As Wolfers notes, the three-month average climbed to 4.5 for September to November, after hitting a four-year high in Tuesday’s jobs report, compared to 4.0 percent in January.

“That’s up half a point, and it’s blinking red,” Wolfers posted to X.

Why It Matters

Talk of an impending recession eased in the fall, after GDP growth figures came in ahead of expectations and tariffs failed to result in as immediate or significant an increase in prices as some had feared.

However, some economists continue to express fears that it would take only a few shocks—such as the AI “bubble” bursting—to push the country into a major downturn, and that many states may already be in decline.

President Donald Trump gave his economy a grade of “A+++++” in a recent interview with Politico, but the tail end of 2025 has seen more Americans grappling with high and rising costs, surveys detailing consecutive drops in consumer confidence and, as Wolfers notes, a monthslong slowdown in hiring that is now combining with an uptick in layoff announcements.

What To Know

Wolfers, a frequent critic of the Trump administration’s economic agenda, issued his warning following Tuesday’s employment report, which combined payroll figures for October and November, given delays to regular releases due to the government shutdown.

The Bureau of Labor Statistics (BLS) revealed that the economy added 64,000 jobs in November, ahead of most forecasts, but shed 105,000 in October. The BLS said October’s decline was largely driven by government employees who accepted the administration’s deferred resignation offer earlier this year, and who came off the federal payrolls during the month.

While economists were pleased to get government employment data after a lengthy shutdown-induced fast, Bankrate senior economic analyst Mark Hamrick told Newsweek: “The not-so-good news is that it isn’t pretty.”

Job gains for the previous two months were also revised down by a total of 33,000, and as Wolfers wrote on Tuesday: “The headline numbers suggest VIRTUALLY NO EMPLOYMENT GROWTH since April.” Meanwhile, the unemployment rate rose to 4.6 percent, its highest level since September 2021, informing his pessimistic reading of the Sahm Rule.

But Claudia Sahm, the former Federal Reserve economist who developed the measure, told Newsweek that while rising unemployment “is a concern,” it is not yet “at levels typically seen in the early stages of a recession.”

She added that an extra complication was the Sahm Rule’s reliance on a three-month average, and the absence of an October unemployment rate, which the BLS did not calculate or release citing data collection issues caused by the shutdown.

“I would be cautious with standard ‘rules of thumb’ for the next few months,” she told Newsweek.

What People Are Saying

Market analyst Daniela Hathorn, in comments shared with Newsweek following Tuesday’s report, said: “The figures confirm that job growth remains modest and the labor market continues to slow, with 64,000 payrolls added in November after a dip in October, a clear deceleration from prior months. The unemployment rate rose slightly higher than expected at 4.6 percentage, further softening from earlier in the year, and wage growth continues to ease modestly compared with previous months. All told, this is consistent with a labor market that is losing steam rather than overheating.”

Kevin Hassett, director of the National Economic Council, told CNBC after the reading: “We dropped about 160,000 government workers—federal government—who are the people who took the buyout that, you know, we began that program in spring and gave people until the fall to step aside. And so, I think that from the private sector point of view it’s just about what we’ve been getting all year. It’s [a] solid upward trajectory.”

Read the full article HERE.

Two months before Black Monday, the market crash that led to the Great Depression, a Massachusetts economist named Roger Babson, fretting over a wave of mom-and-pop investors borrowing money to buy stocks, declared in a speech that “sooner or later a crash is coming and it may be terrific.” Afterward, the market sank 3%, a dip known at the time as the “Babson Break.” But in the weeks that followed, writes Andrew Ross Sorkin in his engrossing new history, 1929: Inside the Greatest Crash in Wall Street History—and How It Shattered a Nation, “the market shook off Babson’s foreboding,” in part because of optimism over new mass-market products like the radio and the automobile. “Investors with an ‘imagination’ were winning again.”

Today there are many Cassandras like Babson warning about AI, in particular the valuation of public and private technology companies and their headlong pursuit of the elusive goal of artificial general intelligence (systems that can do just about anything a human can do and more). Tech companies are on pace to spend just shy of $1.6 trillion annually on data centers by 2030, according to data analyst Omdia. The magnitude of the hype around AI, whose prospects as a profit maker remain entirely hypothetical, has confounded many sober-minded investors. Yet now, as a century ago, the idea of missing out on the next big thing has persuaded many companies to ignore such prophecies of doom. They “are all kind of playing a game of Mad Libs where they think these moonshot technologies will solve any existing problem,” says Advait Arun, a climate finance and energy infrastructure analyst at the Center for Public Enterprise, whose recent Babsonesque report, Bubble or Nothing, questioned the financing schemes behind data center projects. “We are definitely still in the irrational exuberance stage.”

Journalists usually would be wise to abstain from debating whether a resource or technology is overvalued. I have no strong opinion on whether we’re in an AI bubble, but I wonder if the question may be too narrow. If you define a speculative bubble as any phenomenon where the worth of a certain asset rises unsustainably beyond a definable fundamental value, then bubbles are pretty much everywhere you look. And they seem to be inflating and deflating in lockstep.

There may be a bubble in gold, whose price has soared almost 64% in the year to Dec. 12, and one in government debt, according to Børge Brende, chief executive officer of the World Economic Forum, who recently observed that nations collectively haven’t operated this deeply in the red since World War II. Many financiers believe there’s a bubble in private credit, the $3 trillion market in loans by large investment houses (many for the purpose of building AI data centers) that’s outside the heavily regulated commercial banking system. Jeffrey Gundlach, founder and CEO of money-management firm DoubleLine Capital, recently called this opaque, unregulated free-for-all “garbage lending” on the Bloomberg podcast Odd Lots. Jamie Dimon, JPMorgan Chase & Co.’s CEO, dubbed it “a recipe for a financial crisis.”

The most obvious absurdities have materialized, where there’s no easy way to judge an asset’s intrinsic worth. The total market value of Bitcoin, for example, rose $636 billion from the start of the year through Oct. 6—before losing all of that and more, as of Dec. 12. The trading volume of memecoins, those virtual contrivances that commemorate online trends, peaked at $170 billion in January, according to crypto media firm Blockworks, but by September had collapsed to $19 billion. Leading the decline were the $TRUMP and $MELANIA coins, launched by the first family two days before Inauguration Day, which have lost 88% and 99% of their worth, respectively, since Jan. 19.

Many investors evaluated these crypto currencies not for their potential to create underlying value for shareholders and the world—the way they might for a stock in a conventional company that reports earnings, for example—but more narrowly for the chance to make a lot of money quickly. They approached it a little like they would sidling up to the craps table on a trip to Las Vegas.

There might be demographic reasons that investors, particularly those drawn to crypto, sports gambling and online prediction markets, are trying to game financial markets as if they were casinos. According to a recent Harris poll, 6 in 10 Americans now aspire to accumulate extreme wealth. Seventy percent of Gen Z and millennial respondents say they want to become billionaires, versus 51% of Gen Xers and boomers. A study last year by the financial firm Empower suggested that Zoomers believe that “financial success” requires a salary of nearly $600,000 and a net worth of $10 million.

Thanks to TikTok videos, group chats, Reddit boards and the instantaneous and unavoidable nature of the internet, everyone in the world is now apprised of moneymaking opportunities at the same time. That sounds fine in principle but has led to a frenzy of imitation, mass competition and hive-mind behavior that makes the new Apple TV show Pluribus look timely. The traditional economy, with its complicated and infinitely varied dimensions, has been supplanted by the attention economy—the things we’re all, everywhere, obsessing about at any particular time.

In the business world, that singular focus is on AI. In popular culture there was a Sydney Sweeney bubble, which followed a Pedro Pascal bubble, and a “6-7” bubble. (If you don’t have teens, just Google it.) Over the past year, thanks to celebrities such as Lisa from the K-pop band Blackpink, we also have a worldwide mania over the cute but worthless zoomorphic stuffies sold by Chinese toymaker Pop Mart International Group. Call it the Labubble.

In food there’s most certainly a protein bubble, with everyone from the makers of popcorn to breakfast cereal marketing their protein content to appeal to health-conscious consumers and GLP-1 users. In media there just might be a bubble in Substack newsletters, celebrity-hosted podcasts (Amy Poehler’s Good Hang and Meghan Markle’s Confessions of a Female Founder) and celebrity-focused documentary biopics authorized by their subjects and available to stream nearly every week (the latest on Netflix: Being Eddie on Eddie Murphy, and Victoria Beckham). “Everyone’s reference group is global and goes far beyond what they can see around them and beyond what their actual class or position is,” says W. David Marx, the author of Blank Space: A Cultural History of the Twenty-First Century. “You can have globally aligned movements within these markets that in the past would have been impossible.”

The stakes are higher for AI than they are for Labubus, of course. No company wants to be left behind, and so every major player is plowing forward, building computing infrastructure using complex financing arrangements. In some cases this involves a special purpose vehicle (remember those from the 2008 financial crash?) loaded with debt to buy Nvidia Corp. graphics processors, the AI chips that some observers think may depreciate more quickly than expected.

The tech giants can weather any fallout from this FOMO-induced stampede. They’re paying for their data centers largely from their robust balance sheets and can navigate the consequences if white-collar workers all decide that, say, the current version of ChatGPT is plenty good enough to craft their annual self-evaluation. But other companies are engaging in riskier behavior. Oracle Corp., a stodgy database provider and an unlikely challenger in the AI rush, is raising $38 billion in debt to build data centers in Texas and Wisconsin.

Other so-called neoclouds, relatively young companies such as CoreWeave Inc. and Fluidstack Ltd. building specialized data centers for AI, Bitcoin mining and other purposes, are also borrowing heavily. Suddenly the cumulative impact of an AI bubble begins to look more severe. “When we have entities building tens of billions worth of data centers based on borrowed money without real customers, that is when I start worrying,” says Gil Luria, managing director at investment firm D.A. Davidson & Co., evoking Roger Babson from a century ago. “Lending money to a speculative investment is never a good idea.”

Carlota Perez, a British-Venezuelan researcher who’s been writing about economic boom and bust cycles for decades, is concerned as well. She says innovation in tech is being turned into high-stakes speculation in a casino economy that’s overleveraged, fragile and prone to bubbles ready to pop as soon as active doubt begins to spread. “If AI and crypto were to crash, they are likely to trigger a global collapse of unimaginable proportions,” she wrote in an email. “Historically, it is only when finance suffers the consequences of its own behavior, instead of being perpetually bailed out, and when society reins it in with proper regulation, that truly productive golden ages ensue.” Until then, hold your Labubus tightly.

Read the full article HERE.