Gold extended its a relentless rally on Thursday, crossing past $5,500 per ounce and hitting another record high. Spot gold prices gained more than 3%, and were last trading at $5,501.18 an ounce, according to LSEG data. Gold futures for February rose over 3% to reach $5,568.66 per ounce. Spot silver prices advanced over 2% to $119.3 per ounce, and U.S. silver futures for March climbed almost 5% to $118.73 per ounce. The rise in the prices of gold and silver to new highs this month has been driven as much by investors seeking shelter from rising geopolitical uncertainty as growing fundamental demand for the precious metals, analysts say. Silver crossed $117 an ounce for the first time on Thursday after posting a over 145% gain in 2025, data from LSEG showed. The white metal is up almost 65% since so far this year. The gains have lifted the precious-metals complex from platinum to palladium, and even base metals. “We’ve been predicting a melt up in the price of gold since early last year,” said Ed Yardeni, president of Yardeni Research. But he added: “It has turned into a melt up in the prices of all precious metals, many base metals, and rare earth minerals.” I would label the precious markets as broken given unheard of volatility. MKS PAMP Nicky Shiels Analysts attribute the demand from investors seeking protection from a mix of geopolitical tensions, swelling government debt and uncertainty over the outlook for interest rates and currencies. Persistent central-bank buying has underpinned gold even as borrowing costs remain elevated, while expectations of eventual monetary easing have boosted the appeal of non-yielding assets. Silver surges Silver has amplified the move, supported by its role as an industrial metal, with demand tied to solar power, electronics and electrification trends adding to upward momentum in an already supply-constrained market. “I would label the precious markets as broken given unheard-of volatility,” Nicky Shiels from MKS PAMP told CNBC. Analysts said prices are being driven less by physical supply and demand than by volatile liquidity flows, causing extreme swings and repeated dislocations from fundamentals. @SI.1 1M mountain Silver’s rapid march up was followed by an even quicker retreat this month “Precious metals have melted up the past two months and are overbought on a tactical basis,” she added. Maximilian Tomei, chief executive officer and co-portfolio manager at Galena Asset Management, echoed that the recent price action has less to do with fundamentals. XAU= XAG= 1Y mountain Gold and silver prices have been notching record highs “The movement you’re seeing in metals today is not necessarily about fundamental demand for the metal itself. It’s a movement driven by a weakening denominator, right?” Tomei said. “That’s important, because gold is a bit like a currency. If the denominator you price it against weakens, then the gold price will go higher.” The dollar index, which measures the U.S. currency’s strength against a basket of currencies, has declined nearly 11% over the past 12 months. Tomei warned, however, that while growing fundamental demand for precious metals has been a driver of the recent gains, that alone fails to justify the magnitude of the rise. “Fundamentals don’t explain a commodity being up 200%,” he said. “The way silver is behaving is exaggerated, it’s a series of disconnects. The market is broken,” he said. Tomei added that another potential driver for precious metals is also excess liquidity sloshing through global markets. As asset prices rise, investors are able to borrow more against their portfolios, through margin loans and other forms of leverage that are often hard to see, effectively creating new money in the system. When valuations in equities become stretched, some of that liquidity looks for elsewhere to go, he explained. In Tomei’s view, metals such as gold and silver increasingly serve as a parking place for that capital, not because fundamentals have dramatically changed, but because liquidity needs a home. Some analysts pointed to how government bonds have lost some of their traditional appeal as a safe haven amid swelling debt burdens, as seen in recent global bond selloff movements. Detached from reality? The result is exaggerated price moves, especially in smaller precious metals markets, where relatively modest inflows can push prices sharply higher, making the rally feel detached from traditional supply-and-demand dynamics. Likewise, Guy Wolf, global head of market analytics at global financial services platform Marex, signaled that the price action in parts of the precious-metals complex has become increasingly distorted. Markets such as silver and platinum are a fraction of the size of gold or major equity benchmarks like the S & P 500, meaning the recent influx of speculative capital is having an outsized impact on prices. Production capacity constraints mean the physical supply of metals can’t increase quickly enough to meet surging demand, resulting in prices that have become “totally detached from where physical demand is robust,” he said, a dynamic that could reverse just as sharply once speculative investors begin to take profits and liquidity peters out. However, not everyone agrees that price discovery – the process of establishing a market price at which demand and supply for an item are matched – has collapsed altogether. Gautam Varma, managing director of strategic advisory V2 Ventures, shied from calling the precious metals market broken, but noted that the surge reflects a growing influence of speculative capital. “What you can see is there’s a lot more speculative capital which has come into play, and that speculative capital may be there for reasons other than the fundamental demand and supply.”