Precious metal prices are hitting historic highs. On Monday, January 26, gold exceeded USD 5,000 per ounce, and silver broke through the USD 100 barrier for the first time in history. Since the beginning of the year, gold has already risen by 17%, continuing the dynamic upward trend that began in the fall of 2022.

As emphasized by Marta Bassani-Prusik, director of investment products and foreign exchange at Mennica Polska, the current price levels are not the result of short-term speculation, but the culmination of long-term processes taking place in the global economy.

“This is not a temporary spike, but part of a broad trend that has been growing over the last few years. Each subsequent quarter has added new risk factors, strengthening the demand for precious metals,” points out the expert from Mennica Polska.

One of the key drivers remains growing geopolitical tensions. The war in Ukraine, conflicts in the Middle East, disputes over Taiwan and Greenland, and growing trade pressure between the world's largest economies are causing investors to seek stable forms of capital protection.

“Basically, every day we wake up to a new geopolitical reality, which encourages capital flight to safe assets such as gold and silver,” adds Marta Bassani-Prusik.

The weakening US dollar also remains an important factor. Precious metals traditionally show an inverse correlation with it, and in addition, markets are increasingly discounting the Federal Reserve's more dovish monetary policy.

“Expectations of interest rate cuts or their prolonged maintenance at low levels reduce the cost of holding non-interest-bearing metals, which clearly supports their prices,” explains the director of investment products and foreign exchange at Mennica Polska.

The expert also points to strong investment demand, driven by both central banks and individual investors.

“We are seeing a copycat effect: central banks have been increasing their gold reserves for years, and private investors are increasingly copying these actions, which further fuels the demand spiral,” notes Marta Bassani-Prusik.

In the case of silver, the increases are also supported by growing industrial demand, related, among other things, to the energy transition and the development of new technologies. According to the expert, if the current macroeconomic and political conditions persist, the precious metals market may continue to surprise with further records.