Silver Smashes $90, Gold Tops $4,630 on Haven Demand
Precious metals hit fresh all-time highs as geopolitical tensions and Fed uncertainty fuel a flight to safety. Analysts see silver at $100 and gold at $5,000.
Silver finally joined gold above its psychological ceiling. Both metals are trading at levels that seemed absurd a year ago.
Spot silver climbed above $90 per ounce Wednesday morning for the first time in history. Gold pushed past $4,630, adding to a streak of record closes that has defined the first weeks of 2026. The metals are up roughly 6% since New Year's Day alone, with no signs of slowing.
The catalyst mix hasn't changed—it's just intensified. Softer U.S. inflation data reinforced expectations that the Fed will cut rates this year. Meanwhile, geopolitical tensions have traders buying anything that isn't a fiat currency.
The Numbers
Silver futures touched $90.15 before pulling back slightly. That's up from around $75 where we last saw the metal reverse sharply after briefly touching $80 in late December. The difference this time: no immediate reversal. Buyers remain in control.
Gold crossed $4,630 in early trading, topping its previous record from last week. The yellow metal has now gained more than 6% year-to-date, extending a rally that saw prices rise 66% in 2025—the best annual performance since 1979.
Both metals outpaced the broader commodity complex. Copper and tin also touched fresh highs, but the haven trade in precious metals has been the dominant story.
What's Driving the Rally
Three overlapping catalysts explain the move.
First, real rates are declining. Tuesday's CPI report showed headline inflation at 2.9% year-over-year—still above target but not accelerating. Markets now price in Fed rate cuts starting in mid-2026, which lowers the opportunity cost of holding non-yielding assets like gold and silver.
Second, institutional demand remains strong. Central banks added to gold reserves throughout 2025 and show no signs of stopping. China and Russia have led buying, but even traditional Western central banks have increased allocations as dollar diversification gains traction.
Third, geopolitical risk is elevated. The ongoing uncertainty around Fed independence, potential U.S. involvement in Iran, and the Supreme Court's pending tariff decision have created a toxic mix of uncertainty. When nothing feels safe, gold benefits.
Analyst Targets Keep Rising
Wall Street has capitulated to the metals rally.
Goldman Sachs projects gold at $4,900 by December 2026. Bank of America sees a path to $5,000. The most aggressive target comes from Yardeni Research at $6,000 by year-end.
For silver, the $100 level—once considered extreme—is now the consensus target. A Kitco survey found 57% of retail investors expect silver above $100 this year. Industrial demand from solar panels and EVs provides fundamental support beyond the speculative flows.
"Resource nationalism is accelerating the bid," one commodity strategist noted. Both the U.S. and China are attempting to secure critical metals, creating bidding competition that wasn't present in previous cycles.
The Gold-Silver Ratio
Silver's outperformance has compressed the gold-silver ratio to below 52, down from 80 earlier in the cycle. Historically, ratios below 50 signal silver is relatively expensive—but momentum traders don't care about history when prices are breaking out.
The ratio's compression suggests speculative capital is flowing into silver for leverage. Silver moves faster than gold in both directions. Traders betting on continued precious metals strength often use silver as their vehicle.
Trading Considerations
The metals are clearly extended. Silver has gained 14% in January alone, and the $90 round number could act as resistance like $80 did in December. Profit-taking is a reasonable expectation.
But calling a top has been expensive. Bears have been wrong for 18 months as prices climbed from $20 to $90. The macro backdrop—Fed uncertainty, central bank buying, geopolitical risk—hasn't shifted.
For traders, the question isn't whether precious metals are overbought. They clearly are. The question is whether the forces driving them higher have exhausted themselves. Right now, the answer appears to be no.