A chaotic start to the year
The year 2026 opened amid political upheaval. President Donald Trump threatened decisive action against Iran. The threat followed US forces capturing Venezuela’s leader. His administration launched a criminal investigation into the Federal Reserve chair. Officials also targeted core profits of banks and institutional investors. These actions injected widespread uncertainty into global markets.
Stocks remain surprisingly steady
Many expected equities to drop sharply. That decline never occurred. Traders largely ignored the political turmoil. US stock indexes hit record highs early in the week. Prices later eased only slightly. Markets showed resilience despite growing geopolitical and economic concerns.
Metals surge as fear spreads
Investors shifted toward commodities. Silver jumped more than six percent on Wednesday. Prices broke above 90 dollars an ounce. Silver is up 29 percent for the year. That follows a 141 percent gain in 2025, its strongest year since 1979.
Gold also climbed. Prices rose nearly one percent on Wednesday. Gold traded above 4,600 dollars per troy ounce. The metal gained 22 percent so far in 2026. In 2025, gold surged 65 percent, its best year since 1979.
Industrial metals also saw gains. Tin, copper, aluminum, lithium, and zinc all rose in 2026.
Safe-haven demand drives buying
Gold remains a classic refuge in uncertain times. Investors use it to hedge inflation and deficits. Geopolitical tensions strengthen its appeal. Economic worries push investors toward tangible assets, boosting demand for metals.
Metal prices jumped after US strikes in Venezuela. Prices climbed again after Trump escalated threats against Iran. Crackdowns on protesters further heightened market anxiety.
Federal Reserve concerns add fuel
Metals gained more momentum amid central bank turmoil. Federal Reserve Chair Jerome Powell confirmed a criminal investigation against him. Investors feared political interference. Questions about the Fed’s independence raised broader economic concerns. Short-term rate cuts could lift stocks temporarily. Long-term risks include lost credibility and renewed inflation pressures.
These fears revived the “Sell America” trade. US Treasuries and the dollar fell. Concerns over large deficits increased metals’ attractiveness. Capital leaving other markets made gold and silver more appealing.
Strong demand underpins the rally
Fundamental demand supported metals’ rise. China expanded exports despite rising tariffs. Its trade surplus reached record levels. That boosted demand for metals used in electronics and technology.
Artificial intelligence also increased demand. Expanding data centers required more metals. Technology infrastructure growth continues to push industrial demand.
Rising costs may hit households
Higher metals prices could soon affect consumers. These materials appear in countless goods. Oil prices remain low but are rising alongside other commodities. That trend threatens to increase living costs.
“Bottom line, we see serious industrial metal inflation,” analyst Peter Boockvar wrote. He warned the next Federal Reserve chair will face a major policy challenge.
