Gold

surged to a record above US$5,500 an ounce, extending a breakneck rally fuelled by a weaker U.S. dollar and investor flight from sovereign bonds and currencies to a ninth day.

Bullion jumped as much as 3.3 per cent, building on a 4.6 per cent leap in the previous session – the biggest one-day gain since the height of the

COVID-19 pandemic

in March 2020. Precious metals have risen dramatically this year on heightened geopolitical tensions and worries about the independence of the Federal Reserve, which have supported the debasement trade. Silver also hit an all-time high above US$120 an ounce on Thursday.

Gold’s recent surge “reflects a rare alignment of forces rather than a single catalyst,” said Christopher Hamilton, head of client solutions for Asia-Pacific ex-Japan at asset manager Invesco Ltd. “The speed with which gold is breaking milestones underscores how quickly confidence in traditional policy tools is eroding.”

Spot gold has risen by nearly 30 per cent this year and silver by around two-thirds, in a rapid acceleration of multiyear bull runs. The extent and longevity of the rise has gradually constrained banks’ ability to take positions, reducing liquidity and raising volatility, said Simon Biddle, head of precious metals at broker Tullet Prebon, part of TP ICAP Group.

“Banks don’t have infinite balance sheets to trade precious metals,” he said. “Trading volumes have decreased as they are taking less risk.”

The latest move higher came as traders looked beyond the Fed’s widely expected decision on Wednesday to leave interest rates unchanged and ramped up bets on a dovish policy shift, which would benefit non-yielding precious metals.

BlackRock Inc.

’s Rick Rieder — an advocate for more aggressive rate cuts — has emerged as a top contender to replace Jerome Powell as Fed chair later this year.

The debasement trade is also driving gold, with last week’s massive selloff in the Japanese bond market the latest example of concerns over heavy fiscal spending. Speculation the U.S. may intervene to support the yen has weighed on the dollar, making precious metals cheaper for most buyers.

U.S. President Donald Trump

said this week he was not concerned about a drop in the dollar that dragged the world’s premier reserve currency to its weakest level in nearly four years, although

Treasury Secretary Scott Bessent

later said the administration supports a stronger currency and ruled out intervention to sell the dollar against the yen.

The White House’s actions — threats to annex Greenland and military intervention in Venezuela — have unsettled markets in recent weeks. The U.S. warned Iran on Wednesday to make a nuclear deal or face military strikes, and in recent days has threatened both South Korea and Canada with additional trade tariffs.

“Gold and silver are the ultimate safe-haven assets against extreme risk as geopolitical turbulence continues,” said Hao Hong, chief investment officer at Lotus Asset Management, and an influential Chinese commentator with a large social media following. “Gold is the anchor of all valuations: as long as gold rises, other precious metals will surge as well.”

Silver rose as much as 3.2 per cent, its sixth straight day of gains. The white metal’s dramatic surge prompted CME Group to raise margins on Comex silver futures with effect from Wednesday’s close. In China — where prices have shot up beyond international benchmarks — the only pure-play silver fund turned away new investors while local authorities in Shenzhen set up a task force to oversee the operations of a gold-trading platform.

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Underlining the risks to precious metals, gold’s relative strength index spiked above 90 and silver’s was around 84. Readings above 70 typically signal the metal has been bought so heavily it could be due for a pause or pullback.

Gold rose 2.5 per cent to US$5,549.93 an ounce as of 3:33 p.m. in Singapore, having earlier hit an all-time high of US$5,595.47. Silver climbed 1.3 per cent to US$118.21 an ounce. Platinum and palladium advanced, while the Bloomberg Dollar Spot Index fell 0.2 per cent on Thursday and was down 1.3 per cent for the week.

Bloomberg.com