Precious metals began the first trading session of the New Year by continuing their strong gains in 2025 as geopolitical tensions and expectations of a US interest rate cut kept gold demand high.

Spot gold prices rose 0.5% to $4,335.50 an ounce, as of 10:25 a.m. ET (15:25 GMT), after hitting $4,402.06 earlier in the session. Bullion hit a record high of $4,549.71/oz on December 26, marking a 64% increase in 2025.

US gold futures for February delivery rose 0.1% to $4,346.20/oz. "We continue to see the market talking about a March interest rate cut and possibly another later this year.

That combination, along with significant talk about potential market risks from tariffs and ongoing U.S. debt, is all driving gold, silver, platinum, and palladium higher," said Bart Melek, global head of commodity strategy at TD Securities.

GOLD HAS GREATER INVESTMENT APPEAL WHEN INTEREST RATES FALL

The market is anticipating at least two quarter-point Fed rate cuts, making non-yielding gold more attractive to investors.

Gold, a traditional safe-haven asset, is also supported by news of unrest in Iran and the lack of a Russia-Ukraine peace deal, as well as issues surrounding Gaza.

"Technically, the next upside price target for February gold futures traders is a close above strong resistance at the contract/record high of $4,584," Jim Wyckoff, senior analyst at Kitco Metals, said in a note.

Elsewhere, physical gold traded at a premium in India and China for the first time in about two months.

Spot silver rose 2.3% to $72.90/oz, after hitting an all-time high of $83.62 on Monday. Platinum jumped 3.7% to $2,130.55/oz, after also hitting an all-time high of $2,478.50 on Monday.

Both metals outperformed gold in 2025, with silver up more than 147%, driven by its designation as a U.S. essential mineral, supply shortages, and low inventories amid strong industrial and investment demand. Platinum rose 127% last year.

Palladium rose 1% to $1,621.75 per ounce, after closing the previous year with a 76% gain, its biggest gain in 15 years. (alg)

Source: Reuters.com