Gold smashes past $4,400, silver hits record as rate cut bets fuel rally

• Gold hits all-time high of $4,420.01/0z
• Silver hits record high of $69.44/oz
• Platinum at over 17-year high
• Palladium hits near three-year high

By Pablo Sinha and Sherin Elizabeth Varghese

Dec 22 (Reuters) - Gold crossed the $4,400-per-ounce level for the first time on Monday, propelled by expectations of U.S. rate cuts and continued safe-haven buying, while silver followed suit, soaring to a new record high.

Spot gold XAU= climbed 1.7% to $4,413.01 per ounce as of 0955 GMT, after hitting a record high of $4,420.01 earlier in the session. U.S. gold futures GCcv1 for February delivery rose 1.4% to $4,446.70 per ounce.

Bullion has surged nearly 68% this year, marking its biggest annual rise since 1979, fuelled by strong central bank buying, safe-haven flows, and lower interest rates.

Spot silver XAG= climbed 2.8% to $68.98 after hitting a new record high of $69.44 earlier in the session.

Silver has risen 138% year-to-date, driven by an ongoing supply deficit, growing industrial needs and strong investment demand.

"Lower rates are supporting the demand for real assets like gold and silver. But we also have copper at a record high, indicating a desire by investors to hold exposure to broad commodities, likely due to expectations that inflation could stay higher for longer," said UBS analyst Giovanni Staunovo.

Federal Reserve Governor Stephen Miran reiterated Friday that the U.S. central bank should cut interest rates because inflation has cooled and monetary policy needs to offset risks to the job market.

While gold is seen as a hedge against inflation and a safe asset during uncertain times, the non-yielding asset also tends to benefit in lower interest rate environments.

"This is self-fulfilling momentum, but if there is one key fundamental element I would point to, it would be President Trump's reported use of the word 'war' last week with respect to Venezuela, after running on an election ticket revolving in part around the word 'peace'," StoneX analyst Rhona O'Connell said.

Meanwhile, the U.S. dollar .DXY inched lower, and is on pace for its steepest annual decline since 2017, making gold more affordable for overseas buyers.

"Our outlook for gold remains that the yellow metal should reach even higher levels next year, with a target at $4,500/oz," Staunovo added.

Elsewhere, platinum XPT= jumped 4.2% to $2,056.06, hitting its highest in more than 17 years, while palladium XPD= climbed 2.8% to $1,760.86, hitting a near three-year high.

Gold and silver yearly gains