GDP Growth Surprises with 4.3% Rate, Gold & Silver Trade At Record Highs

[Ben Graham]

Gold and silver traded at or near record highs following news that third quarter U.S. gross domestic product (GDP) beat expectations with a 4.3% gain, marking the strongest growth level in two years. Precious metals have posted a blistering rally in 2025, with gold up 70% and silver up 124% this year, and are still climbing despite some pullback this week.

The latest economic news, which was delayed due to the government shutdown, surprised Wall Street economists who expected growth to increase at a 3.2% rate. The strong third quarter performance also exceeded the 2.5% reading in the second quarter.

Strong consumer spending on items like healthcare and recreational vehicles helped boost GDP growth. However, the pace of business investment cooled in the third quarter to 2.8% from 7.3% in the second quarter. Other factors boosting third quarter GDP included a 5.4% jump in investment in equipment and intellectual property, which includes artificial-intelligence related spending.

Trade also boosted the 3Q GDP number by 1.59 percentage points, as exports grew and imports fell.

Jobs Market Weakening, Inflation Cooling—But Still Above Fed’s Target Rate

Despite the strong GDP number, recent data revealed the jobs market is weakening in the fourth quarter. The November unemployment rate rose to 4.6%, the highest level in more than four years. Inflation has cooled, but still remains above the Federal Reserve’s 2% target rate.

Looking into 2026, traders expect the Fed to pull the trigger on several interest rate cuts, possibly as early as January. Lower interest rates are positive for precious metals, as they lower competition from interest-bearing investments.

Fed rates cuts in 2026 are also expected to weaken the U.S. dollar, which has seen strong declines this year. A further weakening in the U.S. currency is a positive factor for gold, as there is a strong inverse correlation between the dollar and gold.

Precious Metals Closing Out 2026 with Historic Rally—And They are Still Climbing

Gold, silver and platinum have outperformed nearly all other asset classes in 2026 with massive price increases. The uptrend in precious metals is firing on all cylinders with silver hitting a new record high above $71 an ounce in late December. Gold is trading near record highs after smashing above the $4,400 level.

Investors continue to move to the safety of precious metals as geopolitical tensions are climbing with the U.S. starting an oil blockade against Venezuela. Geopolitical jitters are rising amid concerns that Venezuela’s allies including Russia and China could get involved if the conflict with the U.S. escalates. Precious metals have long-served as a safe-haven asset in times of war throughout history.

Another factor propelling precious metals higher are risks around government debt that continues to expand not just here in the U.S. but around the globe. Gold and silver are assets which are seen defending and protecting portfolios from the debasement of paper money as government debt levels climb.

Managing Risk in Your Portfolio

As we move into 2026, today is the ideal time to evaluate your portfolio and add more wealth protection to your personal situation. Even if you already own gold and silver, it may not be enough. For conservative investors, a 5 to 10% allocation to precious metals could be enough for capital preservation and a hedge against volatile markets. For moderate investors, a 10-15% allocation to precious metals can provide you a balanced approach to safety and growth. For risk-averse investors, a 15 to 20% allocation to precious metals can provide significant protection against stock market crashes, geopolitical tensions and financial crises.

With forecasts for $5,000 and even $6,000 gold, there is significant upside ahead when you act today. Increase your allocation to precious metals today. Protect and grow your wealth for tomorrow.

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