Hot Start to the Year for Precious Metals

Gold and silver hit new highs

Gold and silver prices have hit new record highs so far in 2026.

On Tuesday, gold rose above US$4600 an ounce for the first time, while silver eclipsed US$85/oz, driven uncertainty around Iran, Venezuela, Greenland and the independence of the US Federal Reserve.

On Monday, RBC Capital Markets said it had expected uncertainty to be a key theme in the gold market in 2026 and 2027.

“Here we are in the second week of 2026 with revived concerns about the Fed’s independence adding to uncertainty and pushing gold more than US$100/oz higher, above US$4600/oz at the time of writing,” RBC gold strategist Christopher Louney said.

“This is yet another instructive reminder that, while it may at times come from unexpected sources, uncertainty should be an expected upside driver of gold prices in 2026 that potentially adds risk skew to the upside of even our forecast high scenario.”

On Friday, the Department of Justice served the Fed with grand jury subpoenas, threatening a criminal indictment related to Fed chair Jerome Powell’s testimony before the Senate Banking Committee last June.

In a video statement released on Sunday, Powell said the unprecedented action should be seen in the broader context of the administration’s threats and ongoing pressure.

US President Donald Trump has previously threatened to fire Powell and has called him “dumb” and a “stubborn moron” in the past.

Powell said the latest threat was not related to his testimony last June or the renovation of Feb buildings.

“Those are pretexts. The threat of criminal charges is a consequence of the Federal Reserve setting interest rates based on our best assessment of what will serve the public, rather than following the preferences of the President,” he said.

“This is about whether the Fed will be able to continue to set interest rates based on evidence and economic conditions—or whether instead monetary policy will be directed by political pressure or intimidation.”

Canaccord Genuity analyst Carey MacRury said the timing of the action was odd, given Powell’s term would end in May.

“Despite the increasing pressure, the market is pricing in a 95% probability of no change at the January 28 meeting and no rate cuts until the June meeting, which would be the first under the new Fed chair,” he said.

“In our view, political pressure on the Fed only increases the appeal of gold as a global reserve asset.”

Louney said heightened interference in the Fed’s independence could contribute to gold surpassing even RBC’s high scenario outlook.

RBC’s high scenario would see gold averaging US$5108/oz this year and US$5296/oz.

Its middle scenario is for gold to average US$4427/oz in 2026 and US$4225/oz.

‘Powerful cocktail’

“With investors and markets at large juggling a whole host of risks spanning Greenland, regime change in Venezuela, instability in Iran, and now the independence of the Fed, plus inflation and other macro narratives, there is not a clean or easy hedge,” Louney said.

“Gold serves as a catch-all, and a default hedge of last resort for fear and uncertainty given its reputation as a safe haven and store of value, the fact that it is non-debaseable, and is no one else’s liability.”

RBC said “the confluence of these underlying uncertainties themselves adds to the powerful cocktail of gold-positive price effects that will keep gold elevated and could have the potential to push gold beyond even our high scenario”.

“This uncertainty could accelerate inflows into ETPs, add to official sector flows (namely at the margin), and factor into the macro-economic value of gold, transmitted via the dollar, rates, inflation, and equity market performance (among other factors),” Louney said.

Canaccord noted gold ETF holdings rose by 19%, or 484 tonnes, in 2025 to 3078t, the first year of positive inflows since 2000, and back above 3000t for the first time since 2022.

“The market value of those holdings nearly doubled in 2025 and now exceeds US$425 billion,” analyst Tim McCormack said.

Canaccord lifted its 2026 gold price forecast by 2% to US$4401/oz and raised its long-term gold price forecast, from 2029, by 3.5% to US$4909/oz.

Silver flying

Silver stunned in 2025, rising by 145% to an all-time high, a trend that has continued into January.

U.S. Global Investors CEO Frank Holmes noted it was the biggest annual gain for silver on record.

“Notably, an ounce of silver costs more than a barrel of oil right now, a highly unusual position for the two assets to find themselves in,” he said.

Holmes said that while some analysts saw signs of a bubble, that didn’t take into account silver’s growing importance as an industrial metal and recent Chinese restrictions on exports.

“Put all that together – strong industrial demand, low inventories, looming export controls – and you get what FXStreet calls a ‘perfect storm’ for silver,” he said.

According to Canaccord, silver ETF inflows rose by 4586t, or 21%, in 2025 to 26,862t, the strongest year since 2020 and the highest level since 2021.

Canaccord lifted its 2026 silver price forecast by 35.7% to US$71.90/oz and its long-term price by 36.6% to US$77.70/oz.