To The Moon

One 1-kilogram gold bar, two 500-gram gold bars, and one 1-kilogram silver bar are displayed together. Following the US military strike on Venezuela and Donald Trump's threats against Iran, metal prices surged dramatically. Shortly after the capture of Venezuela's leader, Trump threatened "tough measures" against Iran. Concurrently, his administration has launched a criminal investigation into the Federal Reserve Chair while pursuing a reckless anti-inflation policy that threatens the core profitability of banks and institutional investors. The year 2026 began amidst a swirl of chaos. Logically, such negative news should have plunged the stock market into a steep decline. However, stock traders remained largely unfazed by most developments: US stocks hit a record high on Monday, only experiencing a slight pullback thereafter. Instead, investors channeled their panic into the "ignited" metals market. On Wednesday, silver prices surged over 6%, breaking through the $90 per ounce mark, bringing its year-to-date gain to 29%. This rally is particularly staggering, considering silver had already skyrocketed 141% in 2025, marking its best annual performance since 1979. Gold prices rose nearly 1% on Wednesday, firmly holding above $4,600 per troy ounce, with a year-to-date increase of 22%. Like silver, gold also recorded its best annual performance since 1979 in 2025, soaring 65% for the year. Entering 2026, prices for metals such as tin, copper, aluminum, lithium, and zinc have also been on an upward trajectory. Gold has traditionally served as a hedge against inflation, high deficits, geopolitical tensions, and various economic concerns. Much like the "mattress savings" mentality, investors rush to buy tangible assets like gold whenever anxieties arise. Metal prices initially jumped after the US airstrike on Venezuela; they climbed again following Trump's threats against the Iranian regime after its large-scale crackdown on protests. Despite the muted reaction in equities, the announcement on Sunday by Fed Chair Jerome Powell that he is under criminal investigation added further fuel to the metals rally—this development sparked market fears that the Federal Reserve's political independence could be compromised. While a politically compromised Fed might boost stocks in the short term via rate cuts, such a move would damage the central bank's credibility long-term and potentially rekindle inflation, harming the broader economy. These market concerns have also partly revived the "sell US dollar assets" trade strategy, pushing down both US Treasury prices and the dollar's exchange rate. Worries over massive deficits have also resurrected "currency debasement trades," further amplifying this market trend. As capital continues to flow out of bond and currency markets, the relative appeal of assets like gold and silver increases. It's not just market panic driving metal prices higher: traditional supply and demand fundamentals are also at play. Despite high trade barriers, China has opened new export markets, achieving a record trade surplus, which in turn boosts demand for metals used in producing Chinese electronics. Simultaneously, the massive expansion of the artificial intelligence industry is increasing demand for metals needed to support the data centers that underpin this technology. Sustained rising metal prices could pose new challenges for Americans already facing higher living costs—metals are essential raw materials for a vast array of consumer goods. Furthermore, although oil prices remain low, they have begun to rise alongside other commodity prices. Independent analyst Peter Bukovac noted in a client report: "Ultimately, we are facing a severe industrial metals inflation cycle. The next Federal Reserve Chair will confront a particularly thorny dilemma."