Gold and Silver Reach New Peaks Amid Rising Global Tensions

Gold prices surged dramatically, closing in on $5,600 per ounce, setting fresh records on Thursday. The recent boost followed reports that President Donald Trump was contemplating a significant military strike on Iran, intensifying geopolitical worries and pushing safe haven assets higher.

Silver didn't lag, hitting an all-time high of over $120 an ounce, as investors flocked to the precious metal amid heightened uncertainty. At one point, spot gold reached a peak of $5,595.41 per ounce while gold futures climbed to $5,625.89 for April delivery-showcasing the frenzy within the bullion market.

The ripple effect extended beyond gold and silver. Copper jumped over 9% to record highs near $14,356 per tonne on the London Metal Exchange. Its rally largely mirrored prospects of increased Chinese policy support for the real estate sector, a critical demand driver for the metal.

The U.S. dollar's recent weakness also helped fuel the rally in commodities as investors sought diversification away from the greenback. This was coupled with lingering doubts about U.S. geopolitical strategy, especially after military moves in Venezuela and near-term tensions involving Iran.

Market analysts from OCBC pointed out that gold is increasingly perceived as a dependable store of value and a versatile asset that withstands different economic scenarios-not just a hedge against inflation or crisis. This broad appeal helps explain shallow pullbacks amid its ascent.

ETF inflows reinforce this narrative: gold holdings in ETFs jumped by 128,000 ounces on January 28, marking six straight days of inflows and pushing total holdings to just over 100 million ounces-the highest since August 2022, according to ING analysts.

On the geopolitical front, President Trump is reportedly mulling airstrikes targeting Iranian officials linked to suppressing protests and additional attacks on nuclear sites, following a stalemate in negotiations. Any new military action risks further inflaming Middle East tensions, with Tehran vowing harsh retaliation.

Meanwhile, other precious metals cashiered gains. Platinum hovered close to recent highs at $2,791.60 an ounce, while market focus on safe, physical assets remains intact amid policy uncertainties. The U.S. Federal Reserve's steady interest rate stance and upbeat economic outlook did little to temper risk sentiment, although Chair Jerome Powell dodged questions on the Fed's independence amid an active DOJ probe.

Gold and related metals continue to rewrite the record books-whether this pace will hold if cooler heads prevail on the political front remains something to watch.