Gold Surges to 7-Week High as Investors Seek Safe-Haven Assets

Gold prices held steady near seven-week highs on Friday as markets bet on more interest rate cuts next year. The Federal Reserve surprised traders by pushing back against expectations of tighter monetary policy, while silver hovered close to record highs hit just a day earlier.

Spot gold dropped 0.2% to $2,675.44 per ounce by 0236 GMT, but it's still heading for a solid 1.8% weekly gain. The metal hit its highest level since October 21 on Thursday. US gold futures also fell 0.2% to $2,706.20.

The dollar is on track for its third straight weekly decline, making gold cheaper for buyers holding other currencies. This currency weakness has been a key driver behind gold's recent strength.

But silver is where the real action is happening. Spot silver climbed 0.4% to $31.84 per ounce after hitting a record $32.31 on Thursday. It's looking at massive 9.2% weekly gains.

Silver has more than doubled this year, powered by strong industrial demand, shrinking stockpiles, and its inclusion on the US critical metals list. The metal plays a crucial role in solar panels, electronics, and other green technologies, which explains why demand keeps growing.

Other precious metals joined the rally. Platinum gained 0.2% to $968.45, while palladium jumped 1.9% to $1,012.0. Both metals are heading for weekly gains too.

Here's what matters for investors: The Fed's dovish stance suggests lower interest rates ahead, which typically benefits precious metals since they don't pay interest. Lower rates reduce the opportunity cost of holding gold and silver instead of yield-bearing assets.

For silver specifically, the industrial demand story remains strong. As countries push harder into renewable energy and electric vehicles, silver's role as a critical industrial metal becomes more important. Supply constraints add another layer of support to prices.