Dec 26 (Reuters) - Silver breached the $75 mark for the first time on Friday, while gold and platinum hit record highs, buoyed by expectations of U.S. Federal Reserve rate cuts and geopolitical tensions that fueled safe-haven demand.
Spot silver jumped 4.5% to $75.20 per ounce, as of 10:06 a.m. ET (1506 GMT), after hitting an all-time high of $75.62, marking a 161% year-to-date surge driven by supply deficits, its designation as a U.S. critical mineral, and strong investment inflows.
Spot gold was up 1.1% at $4,526.92 per ounce, after hitting a record $4,533.14 earlier. U.S. gold futures for February delivery added 1.3% to $4,559.
"Expectations for further Fed easing in 2026, a weak dollar and heightened geopolitical tensions are driving volatility in thin markets. While there is some risk of profit-taking before the year-end, the trend remains strong," said Peter Grant, vice president and senior metals strategist at Zaner Metals.
Markets are anticipating two rate cuts in 2026, with the first likely around mid-year amid speculation that U.S. President Donald Trump could name a dovish Fed chair, reinforcing expectations for a more accommodative monetary stance.
The U.S. dollar index (.DXY), was on track for a weekly decline, enhancing the appeal of dollar-priced gold for overseas buyers.
On the geopolitical front, the U.S. carried out airstrikes against Islamic State militants in northwest Nigeria, Trump said on Thursday.
"$77/oz and then $80 in silver is within reach by year-end. For gold, the next objective is $4,686.81, with $5,000 likely in the first half of next year," Grant added.
Gold remains poised for its strongest annual gain since 1979, underpinned by Fed policy easing, central bank purchases, ETF inflows, and ongoing de-dollarization trends.
On the physical demand side, gold discounts in India widened to their highest in more than six months this week as a relentless price rally curbed retail buying, while discounts in China narrowed sharply from last week's five-year highs.
Elsewhere, spot platinum rose 8.7% to $2,411.46 per ounce, having earlier hit a record high of $2,448.25, while palladium climbed nearly 10% to $1,850.76.
All precious metals are headed for weekly gains, with platinum recording its strongest weekly rise on record.
Reporting by Sarah Qureshi in Bengaluru; Editing by Louise Heavens
