Gold continued its relentless advance, hitting yet another record high at $4,967 an ounce. The metal is now up more than 7% over the week and has added around $20 so far on Friday alone. Momentum remains firmly with the bulls, with the psychologically significant $5,000-per-ounce level now firmly in sight. Asian trading hours amplified the price action, reflecting how quickly capital now moves into defensive assets during periods of uncertainty.
Silver prices reached a historic week high of $99.39 per troy ounce on Friday, January 23, 2026. In British Sterling, the week’s high was recorded at £73.75 per ounce. Silver has entered a “parabolic” rally, surging by 223% year over year. It surpassed its long-standing 1980 record of $50.36 late in 2025 and is now approaching the psychological $100 barrier.
For retail investors, the instinct is to view such price moves as reactions to daily headlines. Precious metals appear to surge in response to political events, trade threats, or diplomatic tensions. Yet gold and silver rarely reach record levels because of a single incident. Sustained price moves usually reflect a longer erosion of confidence in monetary policy, fiscal discipline, and institutional credibility.
Unlike equities or bonds, precious metals do not respond directly to earnings growth or yield expectations. They respond to credibility, particularly trust in currencies and policymakers. When gold and silver rise together, and when silver accelerates sharply, history suggests markets are pricing uncertainty rather than optimism. To understand whether today’s prices represent excess or continuation, it is necessary to look far beyond the current news cycle.
That perspective begins with the first major breakdown of modern monetary confidence.
When money stopped behaving, gold and silver in the 1970s and 1980s peak
The modern precious metals cycle began with the collapse of the Bretton Woods system in 1971, when the United States formally ended the convertibility of the dollar into gold. This decision dismantled the post war fixed exchange rate regime and ushered in an era of floating currencies. While it provided flexibility, it also removed a key constraint on monetary expansion.
Throughout the 1970s, inflation surged across developed economies, driven by oil price shocks, expansionary fiscal policy, and delayed central bank responses. In the United States, consumer price inflation exceeded 13 percent in 1979, while real interest rates turned sharply negative. Gold, which had been fixed at US$35 per ounce under Bretton Woods, rose steadily as investors sought protection from declining purchasing power and weakening confidence in monetary authorities.
Silver followed the same broad trajectory, but with much greater volatility. As both an industrial metal and a monetary asset, silver was more sensitive to supply constraints and speculative behaviour. By the late 1970s, prices accelerated rapidly, amplified by concentrated buying from the Hunt brothers, whose attempt to dominate the silver market intensified the move and destabilised pricing.
By January 1980, gold reached approximately US$650 per ounce, while silver briefly surged to US$35 per ounce. These levels became synonymous with monetary crisis, reflecting entrenched inflation, weak policy credibility, and widespread concern over the future value of fiat currencies.
The reversal came through decisive policy action. Under Federal Reserve Chairman Paul Volcker, the US central bank raised interest rates aggressively, with the federal funds rate peaking above 19 percent in 1981. This shock restored confidence in the dollar, crushed inflation, and triggered a deep recession. For gold and silver, the impact was immediate. As monetary credibility returned, the rationale for holding precious metals diminished sharply.
What followed was not merely a price correction, but a fundamental shift in investor perception.
The long forgetting, how the 1980s and 1990s buried gold and silver
The decades following the Volcker shock were characterised by disinflation, falling interest rates, and growing faith in central banking. Inflation targeting became mainstream, economic volatility declined, and financial markets expanded rapidly. In this environment, gold and silver lost relevance for most investors.
Gold prices drifted lower throughout the 1980s and 1990s, collapsing in real terms and disappearing from institutional portfolios. By 1999, gold was trading close to US$250 per ounce, reflecting widespread belief that inflation risk had been permanently neutralised. Silver performed even worse, spending long periods below US$5 per ounce as its monetary role faded.
This neglect was underpinned by confidence in institutional credibility. Central banks were viewed as independent and disciplined, fiscal policy was assumed to be responsible, and the dollar-centric global system appeared robust. Holding gold, an asset with no yield, seemed unnecessary in a world convinced that monetary mistakes had been eliminated.
Yet beneath this apparent stability, vulnerabilities were accumulating. Global debt levels rose steadily through the 1990s, financial leverage increased, and asset prices became increasingly dependent on low interest rates. The disappearance of gold and silver from investor consciousness was not merely a market outcome, but a cultural one, reflecting peak confidence in the permanence of the existing system.
It was at this moment of certainty that the United Kingdom made one of the most consequential gold policy decisions in modern history.
Selling the family silver, the UK gold sales and the cost of misplaced certainty
Between 1999 and 2002, the UK government sold approximately 395 tonnes of gold, representing more than half of the nation’s official reserves. The decision was overseen by then Chancellor Gordon Brown and justified as a modernisation of reserve management, reallocating assets into interest-bearing currencies such as the US dollar and the euro.
The sales were conducted at an average price of roughly US$275 per ounce, close to multi decade lows. At the time, the move was widely supported by economists who viewed gold as an outdated reserve asset in an era of stable inflation and credible monetary policy.
The timing proved disastrous. Shortly after the sales concluded, gold began a sustained rally, rising above US$1,000 per ounce by 2009 and, as we all know, continued higher in subsequent years. Estimates of the opportunity cost to the UK taxpayer have since run into tens of billions of pounds depending on valuation assumptions.
Beyond the financial loss, the episode became emblematic of peak confidence in the fiat system. The UK gold sales reflected an assumption that inflation risk had been permanently neutralised and that gold’s role as a hedge against policy failure was no longer relevant.
Within a few years, that assumption would be tested. Even before the global financial crisis, gold prices had begun to rise quietly, signalling systemic stress well before it became visible elsewhere.
The quiet rebuild, gold’s return before most people noticed
The early 2000s did not feel like the beginning of a precious metals cycle. After the dot-com crash and the shock of September 2001, policymakers moved quickly to stabilise markets, cutting interest rates aggressively and encouraging credit growth. Confidence appeared to return, but it was built on increasingly cheap money rather than balance-sheet repair. Gold, which had been left for dead through the 1990s, began to edge higher almost unnoticed.
In February 2001, gold traded close to US$256 per ounce, a price that reflected deep institutional indifference rather than enthusiasm. From that point, the move higher was steady rather than spectacular. Gold was responding to the accumulation of imbalances, not a single crisis. Large current account deficits in the United States, rising leverage, and growing dependence on foreign capital quietly undermined the sense of permanence that had defined the previous decade.
What made this phase important was that gold began rising while risk assets also recovered. This was not a classic panic bid. It was an early signal that monetary credibility was being questioned even as markets rallied. In hindsight, this is often how long precious metals cycles begin, not with fear, but with doubt.
Financial innovation and the ETF era change behaviour
A structural shift arrived in November 2004 with the launch of the SPDR Gold Trust, which trades under the ticker GLD. For the first time, investors could gain liquid, exchange-traded exposure to physical gold without dealing with storage, insurance, or logistics. This mattered far more than most people appreciated at the time.
Ease of access changes behaviour. Gold ownership moved from a deliberate allocation decision to something that could be adjusted intraday. This did not create demand from nothing, but it amplified flows and shortened reaction times. When fear appeared, capital could move into gold instantly. When liquidity was needed, gold could be sold just as quickly.
By the mid-2000s, ETF holdings were rising steadily, reflecting a growing acceptance of gold as a portfolio component rather than a fringe hedge. This laid the groundwork for the metal’s behaviour during the next major stress event. Gold was no longer isolated from the financial system, it was embedded within it.
2008 rewrote the rules permanently
The global financial crisis was the moment when the slow rebuild became undeniable. In March 2008, gold broke through US$900 per ounce for the first time as confidence in the banking system faltered. Yet the crisis also revealed something uncomfortable for precious metals investors, gold can fall during acute liquidity events.
As markets seized up following the collapse of Lehman Brothers in September 2008, gold was sold alongside equities as investors scrambled for cash. This phase is often forgotten, but it matters. Gold is not immune to forced deleveraging. Its strength lies not in the initial panic, but in what follows.
What followed was unprecedented. Central banks responded with quantitative easing, near-zero interest rates, and explicit support for asset prices. This marked a regime shift. Monetary policy was no longer about managing the cycle, it became about preventing systemic failure at almost any cost.
Gold understood this before most markets did. By September 2011, gold reached a record US$1,895 per ounce on the London PM fix, driven by sovereign debt fears in Europe, US fiscal instability, and a growing sense that emergency policy had become permanent.
Silver’s late arrival and violent catch-up
Silver followed the familiar pattern it always does. It lagged gold during the early stages of the crisis, weighed down by concerns over industrial demand. Then, once monetary fear overwhelmed growth fear, it accelerated dramatically.
In April 2011, silver surged to nearly US$49.50 per ounce, above its 1980 peak. The move was fuelled by a weak dollar, speculative inflows, and gold’s momentum. It was also far less stable than gold’s rise. Margin changes and tightening liquidity quickly reversed the move, reminding investors that silver’s volatility is structural, not accidental.
This episode reinforced a recurring lesson. Silver magnifies gold’s message, but it does not lead it. When confidence breaks, silver moves later and faster, and it corrects harder.
Central banks quietly change sides
Perhaps the most important shift of this period happened away from market headlines. After decades as net sellers, central banks became net buyers of gold. According to the World Gold Council, central banks have been net purchasers every year since 2010, with buying accelerating sharply in the past decade.
In 2022, central banks bought 1,082 tonnes of gold, followed by 1,037 tonnes in 2023. These are not speculative flows. They reflect long-term reserve strategy decisions, particularly among emerging market economies seeking to reduce reliance on the US dollar.
This behaviour matters because it signals institutional doubt. Central banks do not chase momentum. When they buy gold consistently, they are acknowledging that the existing system carries risks that paper reserves cannot fully hedge.
From recovery to dependence
By the end of the 2010s, the world had not returned to the pre-2008 model. Debt levels were higher, interest rates remained suppressed, and asset prices were increasingly policy-dependent. Gold consolidated rather than collapsed, holding levels that would once have seemed extraordinary.
This set the stage for the next phase of the story. The drivers that pushed gold higher after 2008 never truly disappeared. They were paused, disguised, and deferred. When the next shock arrived, the response would be even larger, and the consequences more visible.
That brings the story to the recent years of repeated crises, structural risk aversion, and the conditions that have pushed gold and silver to fresh highs again.
From emergency response to permanent condition
By the time the world entered the final years of the 2010s, it was clear that the post-2008 policy response had not been unwound. Interest rates remained suppressed, balance sheets stayed bloated, and financial markets had become accustomed to intervention as a default setting rather than an exception. Global debt continued to rise, with the Institute of International Finance estimating total global debt above US$300 trillion by 2019, a level that left little room for policy normalisation without destabilising markets.
Gold reflected this new reality by refusing to collapse. Instead of retracing back to pre-crisis norms, it established a higher floor, consolidating rather than capitulating. This behaviour mattered. Historically, genuine cycle peaks in precious metals are followed by long periods of irrelevance. That did not happen after 2011. The metal remained embedded in portfolios, signalling that the underlying drivers had softened but not resolved.
Silver followed a similar pattern, though with more volatility. It didn’t reclaim its 2011 highs, but it also failed to return to the deep lows of previous decades. The message was subtle but consistent. The system had stabilised, but it had not healed.
COVID and the moment credibility finally snapped
The arrival of COVID in early 2020 did not create new vulnerabilities, it exposed existing ones. Governments responded with extraordinary speed and scale. Fiscal spending surged, central banks expanded balance sheets aggressively, and monetary policy crossed a psychological threshold. Trillions were created not as a response to financial system collapse, but to deliberately replace lost income and demand.
In the United States alone, fiscal stimulus exceeded US$5 trillion between 2020 and 2021, while the Federal Reserve’s balance sheet expanded from around US$4 trillion to nearly US$9 trillion. Similar responses unfolded across Europe, the UK, and parts of Asia. The justification was clear, but so were the consequences.
Gold responded immediately. In August 2020, it reached a then-record of around US$2,070 per ounce, reflecting the scale of monetary expansion and the sudden realisation that policy constraints had effectively been abandoned. Silver followed, surging above US$26 per ounce as speculative interest returned and industrial demand expectations rebounded.
What changed during this period was not just price, but psychology. Inflation, long dismissed as a relic, returned forcefully. By mid-2022, US consumer inflation exceeded 9 percent, the highest reading in four decades. Central banks were forced into aggressive tightening cycles, but credibility had already been damaged. Investors began to question whether inflation could truly be controlled without triggering financial or political instability.
Geopolitics, fragmentation, and the return of gold as neutral ground
As inflation pressures eased, another driver moved to the foreground. Geopolitics returned as a pricing mechanism. Trade disputes, sanctions, and strategic power competition reshaped global flows. The assumption that economic integration would naturally reduce conflict no longer held.
Gold thrives in fragmentation because it is neutral. It carries no counterparty risk and no political alignment. This matters in a world where sanctions have become routine and reserve assets can be weaponised. Central bank buying, particularly from China and other emerging markets, accelerated as diversification away from dollar dependence became strategic rather than theoretical.
Silver, meanwhile, benefited from a different set of pressures. Energy transition narratives, electrification, and solar demand increased its industrial relevance, while its monetary role re-emerged during periods of stress. This dual identity amplified volatility, but it also expanded the range of scenarios under which silver demand could rise.
By the time renewed tariff threats, trade retaliation, and diplomatic disputes entered the picture again in the mid-2020s, precious metals were no longer responding from a position of neglect. They were already embedded as strategic hedges in a system that felt increasingly brittle.
Why round numbers attract attention and distort judgement
The discussion around US$5,000 gold and US$100 silver is inevitable. Round numbers matter psychologically because they compress complex dynamics into simple milestones. They attract headlines, speculation, and emotional positioning. Yet they are rarely the right way to think about valuation or risk.
Gold does not move because it reaches a particular number. It moves because trust erodes or stabilises. A sharp overshoot towards US$5,000 would likely require a catalyst that directly challenges currency credibility, such as disorderly bond markets, a breakdown in trade relations, or a renewed financial shock. These events are plausible, but they are not constant.
Silver reaching US$100 would almost certainly involve speculative excess layered on top of monetary fear. History suggests that when silver accelerates this aggressively, volatility follows quickly. Gains can be dramatic, but reversals are often just as violent.
For retail investors, the key distinction is between a correction and a cycle peak. Corrections occur frequently in precious metals, often triggered by liquidity events or temporary dollar strength. Cycle peaks tend to coincide with policy repair, restored confidence, and a clear sense that the system has moved back within sustainable bounds. There is little evidence of that today.
How precious metals cycles actually end
Historically, major precious metals cycles do not end quietly. They end when confidence is visibly restored. In the early 1980s, that restoration came through painful interest rate hikes and recession. In the 1990s, it came through disinflation and fiscal restraint. Those conditions are notably absent in the current environment.
Debt levels are higher, political tolerance for austerity is lower, and financial systems are more sensitive to rate shocks. This does not mean gold and silver will rise indefinitely. It does mean that the conditions required to permanently reverse their relevance are far more demanding than in previous cycles.
Until policy credibility is rebuilt rather than managed, precious metals are likely to remain structurally supported, even if prices experience sharp and uncomfortable swings along the way.
What this means for retail investors now
For retail investors, the lesson is not to chase numbers or predict exact turning points. Precious metals are not about precision timing. They are about exposure to uncertainty. Gold tends to reward patience and discipline. Silver rewards neither, but it compensates with leverage to the same underlying forces.
Understanding volatility, setting expectations realistically, and recognising that corrections are part of the process matters far more than hitting exact price targets. The danger lies not in owning precious metals during unstable periods, but in assuming they move in straight lines.
Gold and silver as mirrors, not forecasts
Gold and silver do not predict the future. They reflect the present more honestly than most policy statements. When they rise together, they are signalling discomfort. When silver accelerates, it is amplifying that message, sometimes to excess.
The current price levels are not a verdict on where the world will end up. They are a snapshot of where confidence stands today. Whether gold reaches US$5,000 or silver touches US$100 matters less than why investors are even asking the question.
That, more than any headline or milestone, is the real story.
Disclaimer: The information presented in this article represents the opinions and research of the author and is provided for informational purposes only. It is not intended to be, nor should it be interpreted as, financial, investment, or legal advice. Investors are encouraged to perform their own due diligence and consult with qualified financial advisors before making any investment decisions. Investing in small-cap stocks involves significant risks, and past performance is not indicative of future results. The author and publisher are not liable for any financial losses or actions taken based on the content of this article.
