Gold pushed to its highest level in nearly two months on Friday, powered by a weaker dollar, growing expectations of additional U.S. interest rate cuts, and a fresh wave of safe-haven appetite linked to economic and geopolitical tension.

Silver extended an extraordinary 2025 breakout, shattering another record and underscoring a year in which industrial metals have outperformed even the most bullish projections.

Spot gold rose 1% to $4,327.31 an ounce by 1248 GMT, its strongest reading since October 21 and enough to secure a 3.1% gain for the week. The U.S. futures market tracked the same trajectory, with contracts climbing 1.2% to $4,363.20.

A softer dollar has been central to gold’s latest move. The U.S. currency drifted near a two-month low and was heading for a third consecutive weekly slide, easing pressure on commodity prices globally and making bullion more attractive for international buyers. The dollar’s retreat has been tied partly to weakening U.S. labor data, including a spike in weekly jobless claims — the largest increase in almost four and a half years. That jump erased the sharp drop seen the previous week and raised doubts about the durability of U.S. labor market resilience.

Market analysts said the labor data injected a new layer of caution into investor sentiment. Zain Vawda of MarketPulse by OANDA described gold’s upward push as a combination of economic nerves and geopolitical unease.

“The sharp rise in U.S. weekly jobless claims as well as U.S.-Venezuela tensions are underpinning gold and keeping haven demand strong,” he said.

The Federal Reserve’s third rate cut of the year — a 25-basis-point reduction announced on Wednesday — added more fuel to the metal’s momentum. Although the Fed signaled a more measured approach to further easing, markets have already priced in two rate cuts for 2026. That expectation, combined with softening labor indicators, has strengthened the appeal of non-yielding assets like gold, which typically benefit when borrowing costs fall and real yields weaken.

Attention now shifts to next week’s U.S. non-farm payrolls report, which is expected to play a critical role in shaping near-term Fed expectations. A weak reading would likely deepen the case for lower U.S. rates and could drive bullion toward an even stronger first quarter in 2026.

A separate support pillar emerged from geopolitical tensions involving Washington and Caracas. The U.S. government is preparing to intercept additional ships carrying Venezuelan oil after seizing a tanker this week. The incident heightened anxiety in energy markets and helped push investors toward traditional hedges. Tense energy corridors have historically generated rapid inflows into gold, especially when traders fear disruptions to oil supply routes or a slide in diplomatic stability.

In Asia, the response to high global prices was visible in physical markets. Indian gold dealers widened discounts this week, even though the country is in the middle of the wedding season, traditionally the strongest period for demand. Buyers have been unwilling to absorb prices at current levels. Demand in China followed a similar path, with elevated spot levels discouraging fresh purchases.

Silver, meanwhile, staged another dramatic climb, touching a new record of $64.56 an ounce before easing slightly to $64.09. The metal is poised for a 10% weekly surge and has more than doubled this year. Industrial consumption has remained the dominant force behind silver’s rise, driven by booming demand from solar panel manufacturers, electric vehicle producers, semiconductor fabrication, and emerging energy-storage technologies.

Global inventories have been sliding for months, tightening supply conditions in key hubs and lifting long-term price projections. Silver’s inclusion on the U.S. critical minerals list earlier this year added institutional weight to its rally, making it far more central to U.S. strategic supply planning.

Ole Hansen of Saxo Bank traced the rally to a blend of real-economy demand, thinning inventory levels, and heavy speculative flows.

“Silver is supported by industrial demand amid fears of shortages, a continued tight market, and the speculative frenzy, mostly from retail investors which has helped drive inflows to Silver ETFs,” he said.

Other precious metals gained altitude as well. Platinum rose 3.2% to $1,750.35, and palladium climbed 2.6% to $1,523.10, putting both metals on track for solid weekly gains after a sluggish first half of the year.

Taken together, gold’s steady climb, silver’s blistering rally, and the broader surge across the complex suggest that investors are positioning for an uncertain 2026. Economic signals from the United States have started to wobble, geopolitical tensions remain unstable, and the Federal Reserve is edging deeper into an easing cycle, even if cautiously.

In that environment, the market has migrated back toward precious metals with a level of conviction that had been absent for months — marking a decisive shift in global trading sentiment as the year draws to a close.

Taiwan’s tech-heavy equities are showing no signs of fatigue, even as anxiety about overstretched AI valuations dents sentiment in global markets.

The island’s benchmark Taiex is now within striking distance of the symbolic 30,000 mark — a level investors say could be crossed in early 2026 — extending a blistering rally that has nearly doubled the market over three years, Reuters reports.

The surge rides on a simple reality: Taiwan sits at the heart of the global AI supply chain. And local investors, unlike their global counterparts, aren’t second-guessing that advantage.

Foreign funds have spent much of the year worrying about what many see as an overheated AI trade. But at home, Taiwanese investors have doubled down, latching onto what they describe as structural, long-run opportunities that outsiders may be underpricing.

“The momentum is tied to Taiwan’s role as the world’s semiconductor hub,” said Piter Yang, fund manager at Fuh Hwa Securities Investment Trust. “Taiwan is a major beneficiary of the AI market.”

The rally has endured even as geopolitical tension with Beijing simmers — a factor that has historically spooked global money managers. Domestic investors have shrugged off these concerns, focusing instead on earnings, semiconductors, and a pipeline of new AI-related work that continues to swell.

GPUs and TPUs as Taiwan’s dual advantage

One of the main pressure points in global markets has been the question of whether Nvidia can keep its extraordinary dominance in AI computing. Google’s tensor processing units — or TPUs — have emerged as a cheaper alternative for some customers, sparking fears that Nvidia’s revenue curve could flatten.

But in Taiwan, this shift is seen not as a threat, but as a cushion.

Taiwan is deeply embedded in the manufacturing ecosystem behind both Nvidia’s GPUs and Google’s TPUs. That gives the island a rare dual advantage: competition between the two chip standards still funnels orders back to Taiwanese firms.

“Even rising rivalry between chip architectures ends up supporting Taiwan,” one Taipei-based analyst said. “It ensures more design work, more advanced packaging, more manufacturing runs — all of which benefit companies like TSMC.”

TSMC, the world’s top contract chipmaker, remains the center of that ecosystem and the largest single holding in many Asian portfolios. HSBC strategists wrote this month that the average Asian fund has 10 percent of its portfolio concentrated in TSMC — a level they described as “crowded” but consistent with the chipmaker’s unmatched influence.

Unlike the Nasdaq or Japan’s Nikkei, Taiwan’s market has not seen a valuation blowout. The Taiex trades at a price-to-earnings ratio of about 21 — elevated, but relatively stable given the scale of gains.

“We are not worried about an AI bubble,” said Li Fang-kuo, chairman of the securities investment arm of Uni-President. “We are comfortable with where the valuations stand.”

Li pointed to healthy earnings from Taiwan’s leading chip and component makers and contrasted them with the dot-com era, when many companies had little revenue and almost no profits.

“Several of the ‘magnificent seven’ in the U.S. have gross margins of 70% or above. It’s not comparable to 2000,” he said.

Goldman Sachs echoed that view. “The current industry context does not constitute a full-fledged bubble,” their strategists said in a recent report. Goldman remains overweight tech and predicts hyperscaler capital expenditure will soar to $552 billion in 2026 and $644 billion in 2027 — a flood of investment that feeds directly into Taiwanese supply chains.

Local investors powering the rally as foreign money flees

For all the optimism, foreign money has been heading for the exit. Overseas investors have dumped a net T$533.8 billion ($17 billion) of Taiwanese stocks this year, after T$695.1 billion in net outflows in 2024.

The outflows reflect caution over trade friction, profit-taking after huge gains in past years, and soft concerns about a slowdown in global AI hardware profitability.

But domestic investors have more than made up the difference. Taiwanese funds, retail investors, pension vehicles, and insurance firms have poured billions into equities, especially semiconductor and AI-related names.

“Sentiment at home remains strong,” said one Taipei-based strategist. “Local investors see Taiwan’s ecosystem as irreplaceable.”

Kieron Kader, associate portfolio manager at London-based Alquity, agreed: “The ecosystem’s proximity to TSMC creates a competitive moat that is very difficult to replicate.”

Why analysts still expect more upside

The Taiex is up 22 percent in 2025, matching the Nasdaq’s performance. It trails South Korea’s Kospi, Hong Kong’s Hang Seng, and Japan’s Nikkei — three markets that have enjoyed surges driven by corporate reforms and region-specific catalysts — but analysts argue Taiwan’s rally is built on more durable long-term foundations.

Goldman expects the index to reach about 30,200 over the next 12 months — roughly 7 percent above current levels — fueled by AI servers, advanced packaging, high-end semiconductors, and a steady expansion in hyperscaler orders.

Uni-President’s Li sees the 30,000 mark being crossed in the first half of 2026, led by heavyweights such as TSMC, Foxconn, Elite Material, and other component manufacturers tied into AI computing demand.

“Looking ahead to 2026, the structural demand story around AI and high-end semiconductors remains intact,” said Gina Kim, portfolio manager for emerging markets at Nordea Asset Management. “This points to continued long-term strength.”

Analysts acknowledge risks — including potential pressure on AI hardware margins if customers shift from high-end chips to cheaper alternatives, and any major escalation in U.S.–China tension. Some also warn that heavy reliance on a handful of companies leaves Taiwan vulnerable if demand cycles turn.

Even so, the strength of current order books, the scale of 2026–27 hyperscaler spending projections, and Taiwan’s position as a manufacturing and packaging powerhouse leave most investors confident the rally still has room to run.

In short, global markets may be debating whether the AI boom is too hot to handle. In Taiwan, investors are leaning the other way — betting that the next leg of growth in the global AI economy will still run through the island.