Gold and silver prices hit new records

Gold and silver prices hit new highs on Monday.

Gold Futures hit a record high of $4,477.7 per ounce and last traded at $4,466.90 per ounce. Spot gold was up 2.13% at $4,430.22 an ounce. Prices have increased by almost 70% since the start of the year.

The metal has soared this year, breaking back-to-back price records as risk assets lost ground. Gold is generally considered a safe haven in times of economic or geopolitical turbulence.

Silver typically follows gold and was last seen at a record high of $68.96 an ounce, while spot silver last traded at $68.98. Prices have gained 128% since the start of the year.

In the United States, U.S.-listed shares of gold and silver mining companies rose in premarket trading. The iShares MSCI Global Gold Miners ETF was last seen up almost 2.7%.

While the markets received their much-anticipated drop in interest rates by the Fed on December 10, and optimism returned to AI stocks in the previous trading session, economic speculation for next year has likely put global investors back on the defensive as they seek to balance their portfolios.

Due to outsized budget deficits in the United States, the United Kingdom, Europe and, increasingly, Japan and China, “the monetary value of gold has arguably re-emerged,” according to Matthew McLennan, head of the global value team at First Eagle Investments.

“The value of gold as a potential monetary hedge has reemerged,” McLennan told CNBC’s “The Exchange” on Dec. 17. “Gold has gone from being depressed relative to the nominal assets that you would want to use as a potential hedge against it, to being more rationally valued. And I think the other precious metal complexes have followed it higher with some leverage.”

Investors will also be watching the race to nominate the next chairman of the Federal Reserve, with the central bank’s independence and credibility coming into question following repeated pressure from US President Trump on current Chairman Jerome Powell.

“What we’re focused on here is the long-term fiscal credibility of the United States, because I think that’s the prerequisite for an independent Fed and a rational presidency,” McLennan added.

He also has an eye on wage inflation. “So what really matters going forward is whether job openings, which have increased recently, whether they keep up with rising corporate profits,” he said.