Spot Gold and Silver Continue to Rise, Hitting New Highs

Gold prices rose above $4,600 an ounce on January 12, 2026, marking a new record for the year as geopolitical tensions in Iran and expectations of lower U.S. interest rates continue to fuel demand for safe-haven assets according to market analysis. Silver followed a similar trajectory, hitting a new high of $79.92 per ounce amid strong industrial demand and growing investor interest in precious metals as reported. Central banks and institutional investors have also increased their allocations to both gold and silver, reflecting a broader shift toward diversification and stability in uncertain economic conditions according to reports.

India has become a key player in the global gold market, with its gold ETF holdings rising to 95 tonnes—placing it among the top six countries globally according to data. The surge in investor interest has been accompanied by a significant increase in the number of gold and silver ETF accounts, reflecting the growing acceptance of these vehicles as a preferred investment route as noted.

Market analysts point to a combination of factors driving the current rally, including a weaker U.S. dollar, rising geopolitical tensions, and the expectation of Federal Reserve rate cuts in 2026. These dynamics have made gold and silver more attractive as hedges against inflation and economic uncertainty according to analysis.

Why Did This Happen?

Gold prices have been bolstered by a combination of geopolitical tensions in Iran and a growing concern over the independence of the U.S. Federal Reserve. Analysts note that the recent criminal investigation into Fed Chair Jerome Powell has heightened investor anxieties about the central bank's ability to maintain monetary stability according to analysis. The resulting uncertainty has led to increased demand for gold, a traditional safe-haven asset as reported.

The weakening U.S. dollar has also contributed to the price surge, as gold is priced in dollars and benefits from a lower value of the currency. With the dollar weakening against other major currencies, more investors are turning to gold as a hedge against currency devaluation according to analysis.

Meanwhile, silver has seen a remarkable performance driven by industrial demand and speculative buying. As clean-energy technologies gain traction, the demand for silver—used in solar panels and electronics—has surged. This has pushed prices higher, especially in markets like China and India, where physical premiums have widened significantly according to market data.

How Did Markets React?

The financial markets have reacted to the surge in gold and silver prices with increased volatility and shifting investor sentiment. U.S. stock futures fell after the news of the investigation into Jerome Powell, signaling a risk-off environment in which investors are favoring safer assets as reported.

Precious metals have also drawn attention from central banks and institutional investors. The World Gold Council (WGC) reported that both investors and central banks have increased their gold holdings in 2025, seeking to diversify their portfolios amid economic uncertainty according to the report. This trend is expected to continue in 2026 as central banks look to strengthen their reserve positions and protect against inflation according to analysis.

Silver has also seen a notable rise in trading volumes, particularly in futures markets. The CME Group, a major exchange, raised silver maintenance margins by 47% in early January 2026, a move seen as a way to manage volatility and protect large institutional positions as reported. This action has had a mixed impact, triggering short-term price corrections while also reinforcing the physical shortage in the market according to market analysis.