Precious Metals News: Gold and Silver Hit Unprecedented Record Highs on Multiple Tailwinds

Precious metals have surged to historic peaks, with February gold reaching fresh contract highs and January gold futures posting an all-time high of $4,953.50 per ounce, while January silver futures recorded a new record high of $99.32 per troy ounce. This bullish move in precious metals reflects a confluence of supportive factors spanning currency dynamics, central bank policies, geopolitical tensions, and robust institutional demand.

Dollar Weakness Fuels the Precious Metals Rally

The US dollar index declined by 0.09% today as multiple factors weighed on the currency. The Japanese yen surged sharply—moving from a 1-week low to a 2-week high—amid speculation that Japan’s government was intervening in forex markets to support its currency. This yen strength directly undercut the dollar, creating a headwind for the US currency.

Beyond the yen, the British pound also pressured the dollar. Stronger-than-expected UK manufacturing activity and retail sales lifted GBP/USD to a 2.5-week high, further highlighting dollar weakness across major pairs. While upwardly revised US consumer sentiment data provided some support for the greenback, the overall narrative remains one of dollar depreciation—a dynamic that consistently lifts precious metals prices.

Central Bank Policy Shifts Favor Safe-Haven Demand for Precious Metals

The precious metals market is receiving considerable support from evolving central bank policies. Market expectations now suggest that the Federal Reserve will cut rates by approximately 50 basis points in 2026, while concerns persist that President Trump intends to appoint a dovish Fed Chair—a prospect that would pressure the dollar and bolster demand for precious metals as a store of value.

Meanwhile, the Bank of Japan surprised markets by raising its 2026 GDP forecast to 1.0% (from 0.7%) and lifting its core CPI forecast to 1.9% (from 1.8%), yet still maintained its overnight call rate at 0.75%. This policy divergence—with the Fed potentially easing while the BOJ gradually tightens—widens the rate differential and reinforces dollar weakness, supporting precious metals.

The European Central Bank, on the other hand, is expected to leave rates unchanged in 2026, which offers no particular support for the euro. Additionally, the Fed is actively boosting liquidity in the financial system through $40 billion monthly purchases of Treasury bills, a policy that increases demand for precious metals as investors seek assets beyond traditional fixed-income instruments.

Geopolitical Uncertainty and Fiscal Expansion Drive Safe-Haven Demand

Precious metals continue to climb amid multiple geopolitical flashpoints. Trade tensions surrounding President Trump’s Greenland acquisition rhetoric, combined with ongoing risks in Iran, Ukraine, the Middle East, and Venezuela, have elevated safe-haven demand for precious metals. While NATO Secretary General Rutte announced a breakthrough on Greenland security cooperation, the broader uncertainty remains a price support factor.

A significant catalyst emerged when Japanese Prime Minister Takaichi dissolved the lower chamber of parliament to call a snap election for February 8 to pursue expansionary fiscal policies. While such policies could eventually weaken the yen through higher budget deficits, they immediately triggered a flight-to-safety bid that benefited precious metals demand.

Central Bank Accumulation and Fund Demand Accelerate Precious Metals Prices

Strong central bank demand provides ongoing structural support for precious metals prices. The People’s Bank of China increased its gold reserves by 30,000 ounces to 74.15 million troy ounces in December—marking the fourteenth consecutive month of reserve expansion. Additionally, the World Gold Council reported that global central banks purchased 220 metric tons of gold in Q3 2025, representing a 28% increase from Q2 activity.

Investor positioning has also turned decidedly bullish for precious metals. Long holdings in gold exchange-traded funds recently climbed to a 3.25-year high, while silver ETF long positions rose to a 3.5-year high on December 23. This institutional demand underscores renewed confidence in precious metals as portfolio diversification and inflation hedging tools.

Global Manufacturing Strength Supports Industrial Metal and Silver Demand

Recent economic data reveals surprising strength in global manufacturing, which historically supports demand for industrial metals and silver. The UK’s January S&P manufacturing PMI rose by 1.0 to 51.6—the fastest pace of expansion in 17 months and stronger than expectations. Japan’s January S&P manufacturing PMI climbed by 1.5 to 51.5, marking the strongest expansion pace in nearly 3.5 years. Meanwhile, the Eurozone’s January PMI rose by 0.6 to 49.4, exceeding expectations despite remaining in contractionary territory.

This manufacturing resilience, combined with safe-haven flows and policy divergence, creates a multifaceted support structure for precious metals prices as markets head deeper into 2026.