This rally represents a continuation of the metal’s strongest weekly gain since the 2008 financial crisis, driven by investors flocking to safe-haven assets amidst a febrile geopolitical climate. Silver has followed suit, climbing 6% to record levels of $109 (c. £80) an ounce, buoyed by both industrial demand and its defensive status.

The precious metal’s ascent has been accelerated by US political instability and trade frictions. Following US President Donald Trump’s threat to impose tariffs on European allies regarding control over Greenland, tensions escalated further on Monday with threats of 100% tariffs on Canada for negotiating with China. Simultaneously, the risk of a US government shutdown has increased, with Democrats vowing to block federal spending packages in response to the administration’s immigration crackdown. These internal and external pressures have unnerved investors, prompting a recalibration of exposure to the US economy.

A weakening US dollar has played a pivotal role in the commodities rally, as the greenback struggles against fears of inflation and high government spending. A softer dollar makes dollar-denominated metals cheaper for international buyers. Further weighing on the currency are rumours that the Federal Reserve – which is expected to hold rates steady this week – may soon see a new chair appointed who favours looser monetary policy.

Meanwhile, the pound sterling has reached its strongest level since September. This strength is partly attributed to fading expectations of a Bank of England rate cut in February, following warnings from policymaker Megan Greene regarding persistent wage inflation.

In equity markets, the FTSE 100 has pushed higher, led by mining giants such as Fresnillo, Antofagasta, and Endeavour Mining, whose gains have outweighed the impact of unfavourable exchange rates. Bond investors in the UK also found some reassurance in domestic political stability, as a potential leadership challenge to Prime Minister Keir Starmer was quashed. However, markets elsewhere were less buoyant; Japanese shares slumped as the yen strengthened on speculation of an impending market intervention by US and Japanese authorities. As the week progresses, global markets remain focused on the upcoming Federal Reserve decision and earnings reports from major US technology firms.