Gold and silver are poised to print fresh all-time highs. With strong fundamentals and technical momentum intact, both metals look set for further gains over the coming months.
The Federal Reserve policy will be under the microscope in 2026. Markets are currently pricing in a lowly 16% chance of a quarter-point cut at the January 28th meeting, while the March 18th meeting is pricing in a more bullish 41.4% probability of a 25-basis-point cut. Markets are currently predicting three quarter-point cuts in 2026.
Attention this month will turn to President Donald Trump’s choice of a new Fed chair. Both front-runners, and Trump favourites, Kevin Hassett and Kevin Warsh, are likely to push for even lower rates if inflation remains subdued and/or the job market weakens.
Global central banks continue their relentless buying of gold reserves as institutions continue to diversify away from the US dollar.
This trend shows no signs of abating anytime soon. Silver faces a particularly compelling fundamental case for higher prices. The physical market is experiencing unprecedented tightness in available supply as industrial demand continues to surge, driven by green energy applications. The physical silver shortage intensifies as paper markets disconnect further.
The premium currently being paid for physical silver over spot, paper prices, continues to widen, with physical prices rumoured to be $3-$10/oz more than paper prices. This signals genuine tightness in the deliverable supply of metal. Price discovery continues as scarcity becomes apparent. Investment demand compounds this supply squeeze as retail buyers compete. This supply/demand imbalance will continue to push silver prices higher.
US President Donald Trump’s recent Venezuela action signals a more interventionist foreign policy approach. This geopolitical assertiveness is rumoured to extend beyond Latin America to other strategic regions. Talk of potential action regarding Greenland persists despite strong Danish objections. The US President views the island’s vast mineral reserves as strategically vital, but any move toward Greenland would escalate tensions with European allies. These geopolitical manoeuvres create uncertainty that typically benefits precious metals and gold, and silver are set to thrive in this unpredictable environment.
Both metals remain in strong technical uptrends with momentum intact. Little appears capable of disrupting these trends in the near term. The combination of accommodative monetary policy, geopolitical tensions, and supply constraints creates a powerful bullish cocktail for precious metals going forward.
Gold looks likely to re-test and break above the recent double-top ATH and continue its price discovery. Momentum will likely see $4,750/oz. traded over the coming weeks, with $5,000/oz. set to be tested in H1.
Silver is on a tear with volatility in the semi-precious metal ramping up. The recent paper spike to just under $84/oz. was quickly sold off as talk continues that the market is trying to suppress higher prices as some banks struggle to cover their physical shortage of silver. A break above the recent high is very likely, and above here $100/oz. becomes the next target.
Anyone trading silver must be aware that price action is set to become increasingly volatile, causing regular 10%+, daily price swings. The higher the price of silver goes, the more volatile it will become.
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