Fed holds steady: Gold and silver shine brighter than ever

[Ben Graham]

Federal Reserve Holds Interest Rates Steady

As expected, the Federal Reserve held interest rates steady at Wednesday’s meeting, as the dynamic rush into the safety of precious metals continues this week. Fed policymakers are grappling with above-target inflation and a weakening labor market, and decided to shift into a holding pattern on monetary policy after three interest rate cuts in 2025. The official Fed Funds rate remains at 3.50-3.75%.

Historic Run In Precious Metals Picks Up Speed

Gold raced to a new record high above $5,300 on Wednesday as the U.S. dollar – the world’s premier reserve currency – plunged to a four-year low. Silver set a new record above $115 this week.

Precious metals are in the midst of a spectacular uptrend, driven by political and military risks, macroeconomic uncertainty, a move away from U.S. assets, including the dollar and treasuries, and by investors hedging against stock market risk. These are long-term structural portfolio shifts that are driving metals higher.

Investor Flight From Treasuries Into Bullion

In today’s super-charged geopolitical environment, with Venezuela in the headlines one day, then Greenland, then Iran, gold has become the insurance policy that everyone wants to have. As the U.S. government drowns in debt, a structural shift in investment demand began last year. The U.S. dollar is weakening as some major investors begin to question the safety and reliability of assets like Treasuries and are switching to bullion, with strong precious metals demand coming from sovereign wealth funds and institutional investors.

What’s Next For Precious Metals

Gold is seen running further after topping $5,300 for the first time in history this week. Most analysts expect the record-setting run in gold to continue toward $6,000 this year, fueled by growing global tensions, relentless central bank demand, and strong demand from institutional and retail investors.

A meaningful end to the precious metal’s uptrend would require a dramatic shift to a more stable global geopolitical and economic environment, which isn’t in the forecast any time soon. So, what lies ahead?

The London Bullion Market Association’s annual precious metals forecast survey shows analysts projecting gold rising as high as $7,150 and averaging $4,742 in 2026.
Goldman Sachs raised its December 2026 gold price forecast to $5,400 from $4,900.
Bank of America says gold could reach $6,000 by mid-2026.
Looking at silver, Bank of America notes that current gold-silver ratio readings suggest silver can still outperform gold, with a first target at $135 an ounce.

Now Is Not the Time to Stand on the Sidelines

Current market conditions present a strategically sound opportunity to enhance your allocation to gold and silver. In a fast-evolving global landscape, precious metals remain one of the few assets with the proven ability to preserve and protect capital across generations. If you’ve been standing on the sidelines, now is the time to act. The world is changing fast. Call Blanchard today to discuss the options that are best for your unique financial situation and goals. We stand ready to assist.

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