When trading resumed Friday following the Christmas break, U.S. equities showed minimal movement, while precious metals experienced significant activity.
Silver surged 9.6% to surpass $78 per ounce for the first time in history. Gold advanced 1.3% to a new record of $4,561 per ounce, platinum climbed 10.5% to its own peak, and palladium jumped 13%.
Year-to-date, silver has rocketed 169%, platinum has jumped 172%, and palladium has skyrocketed 124%—all substantially outperforming gold’s 73% gain, Nvidia’s 42% rise, and the S&P 500’s 18% increase.
The recent surge came after on Thursday, compounding other geopolitical strains.
Earlier this week, the Trump administration intensified pressure on Venezuela by sanctioning more oil tankers, restricting a crucial revenue stream for Maduro’s government.
At the same time, the Pentagon deployed numerous special-operations aircraft, personnel and equipment to the Caribbean, .
These additional military resources augment a growing fleet of Navy vessels that have been accumulating in the area for months, as President Donald Trump suggests that U.S. strikes will shortly broaden from alleged drug vessels to land-based targets.
Amid concerns about a potential new regional conflict emerging, investors have turned to safe-haven assets. Concurrently, anxieties about debt have made precious metals seem more secure than alternatives such as the dollar and yen.
Robin Brooks, a senior fellow at the Brookings Institution, stated in that the so-called debasement trade has surged back, observing that precious metals started climbing sharply after Fed Chairman Jerome Powell signaled potential rate cuts during the summer.
“Firstly, this trade is clearly activated by Fed easing and associated concerns about debt monetization,” Brooks wrote. “After all, Chairman Powell’s dovish remarks at Jackson Hole on August 22 and the most recent Fed rate reduction on December 10 were major triggers for precious metals to surge.”
As the U.S. and other major economies race toward increasingly unmanageable debt levels, investors worry that these governments will allow inflation to accelerate and diminish the value of their bonds to ease the burden, instead of controlling deficits.
This debasement trade is not only evident in precious metals, Brooks added, observing that nations with low public debt levels, such as Switzerland and Sweden, have witnessed their currencies rise alongside gold and silver prices.
“It’s notable that Sweden is receiving so much attention. The Krona has historically been a highly volatile currency lacking safe-haven characteristics. The debasement trade is altering that,” he explained.
Likewise, market veteran Ed Yardeni linked the precious metals rally to worries about overly stimulative impacts from U.S. monetary and fiscal policies in the coming year.
This comes as Wall Street anticipates further rate reductions from the Federal Reserve, which has also resumed bond purchases, while consumers will begin to feel the effects of Trump’s tax cuts. Trump has additionally floated the idea of ‘tariff dividend’ payments, though congressional approval would be required.
“In any case, the federal budget deficit could expand dramatically during the initial four months of 2026, potentially triggering the Bond Vigilantes to push Treasury bond yields higher, leading to a stock market downturn,” Yardeni wrote in a Monday note.