Arafat Chose to Fight for 6 Months... Moscow’s Position Was his Greatest Disappointment 

Asharq Al-Awsat publishes recollections of influential players during 1982 Israeli invasion of Beirut. 

Smoke billows from strikes during the Israeli invasion of Beirut in 1982. (Getty Images)
Smoke billows from strikes during the Israeli invasion of Beirut in 1982. (Getty Images)
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Arafat Chose to Fight for 6 Months... Moscow’s Position Was his Greatest Disappointment 

Smoke billows from strikes during the Israeli invasion of Beirut in 1982. (Getty Images)
Smoke billows from strikes during the Israeli invasion of Beirut in 1982. (Getty Images)

On this day in 1982, Beirut was besieged by the Israeli army and Palestinian leader Yasser Arafat boarded a ship that took him to his new exile in Tunisia. The Palestinian Liberation Organization’s loss of its last front with Israel would leave its mark on the Palestinians and Lebanon.

As Israel tightened its siege of Beirut, Arafat took a secret decision to carry on fighting for six months until regional and international stances emerged. He was forced to leave Lebanon after 88 days, marking an end of what he described as the “longest Arab-Israeli war.”

The greatest disappointment to the Palestinian resistance and its allies in the Lebanese National Movement came from their Soviet ally. Moscow had refused to deliver a serious warning or send a destroyer off the Lebanese coast or a ship to evacuate the wounded.

Arafat’s insistence that he leave Lebanon by sea, not through Damascus, reflected the extent of the differences between him and Syrian President Hafez al-Assad. Secretary General of the Popular Front for the Liberation of Palestine – General Command (PFLP-GC) Ahmed Jibril recalled that Arafat had bluntly told him that the Syrian leadership will not be credited for him holding out for three months in Beirut.

Asharq Al-Awsat will publish a series of features highlighting the significant developments and recollections of influential players during that heated summer of 1982.

From a building in east Beirut, Israeli Defense Minister Ariel Sharon observed Arafat as he boarded the ship that would take him to Tunisia. He wrongly believed that had broken the Palestinian resistance and that it would fade away in exile. The invasion failed in luring Lebanon to strike a peace deal with Israel. The current Lebanon has an even more hardline position towards Israel.

Against the backdrop of the war, Syria and Iran will lay the foundation of their alliance. Hezbollah would be born in Lebanon. Syria, which had withdrawn its troops from Beirut in wake of the invasion, would redeploy them years later, before again being forced to pull them out in 2005 after the assassination of Lebanese former Prime Minister Rafik Hariri.

In the besieged city, I was determined to record the testimonials of influential political and security figures. I tried to obtain Arafat’s testimony, but he turned down the offer, saying he didn’t want the Palestinian people to be punished “because of his memories.”

In Tunisia, Arafat told me: “What do you want me to recount? To tell you about Sabri al-Banna (Abou Nidal), who was hosted by three Arab capitals, Baghdad, Damascus and Tripoli, and who was obsessed with assassinating Palestinians, not Israelis?”

“Do you want me to tell you about the so-called intifada in Fatah that was backed by Syria and funded by Libya? Or do you want me to complain about the practices of Palestinian groups that tarnished our image of resistance or led to our labeling as terrorists? I’m not saying that Fatah was faultless. We all made mistakes, but we always tried not to lose our way and lose our cause.”

“The Palestinian people have been punished a lot. They were punished for clinging on to their cause and for firing the first shot. (...) The PLO was punished for adopting a hard line and punished when it adopted a moderate approach. Do you want the Palestinian people to be punished because of my memoirs? I don’t want to open old wounds.”

“As I was leaving Beirut, a journalist asked me: ‘Where to?’ I replied: ‘To Jerusalem. We are preparing for our date in Palestine and Jerusalem. We don’t have any other place to be.’”

The KGB general and Iran

In 1980, Palestinian ambassador to Tehran and Fatah central committee member Hani al-Hassan received an urgent call to head to Beirut. Upon his arrival, Arafat told him they were headed to a meeting at the Soviet embassy. Hassan understood that he needed to voice Arafat’s views. He knew how influential the Soviets were in the Palestinian revolution. He knew of the consequences of refusing delicate Soviet proposals.

Other Fatah members at the meeting included Salah Khalaf (Abou Ayad) and Khalil al-Wazir (Abou Jihad). The Soviets were represented by General “Alexander” who was the KGB official overseeing operations in the Middle East. The insistence that Palestinian leaders, not their representatives, be present at the meeting meant that Moscow expected the talks to yield a decision.

General “Alexander” spoke about the situation in the region, especially Iran, in wake of the Soviet military invasion of Afghanistan. He said the time had come for the Palestinians to cooperate with the Soviets to facilitate the Communist Party’s control of Iran. The Soviet Union wanted to expand its power in the region and Iran was a significant prize given its geographic location and resources.

Hassan was surprised with the proposal and asked to be excused from the meeting, but Arafat refused. Hassan said he would not stand against the Iranian revolution that had “offered us several major services,” referring to its severing of Iranian-Israeli relations that were forged under the shah.

Tensions soon erupted and the Soviet general declared that the Palestinians “won’t be able to do anything without us.” Hassan replied: “If the Soviets enter Iran, then Israel’s strategic value will grow a million-fold to the West. So, don’t even think about it. For our part, we will ensure that every effort is made to form good Iranian-Soviet relations.”

Hassan believed that the meeting exposed how the Soviets dealt with the situations in Lebanon, Iran, Iraq and Afghanistan and future conflicts in these countries.

Meeting in a Soviet forest

Another significant meeting was held years earlier. In the early 1970s, head of the PFLP’s External Operations Wadie Haddad met with KGB chief Yuri Andropov in a forest on the outskirts of Moscow. The meeting was held in utmost secrecy because Haddad at the time had been planning plane hijacking operations for years. Haddad asked for weapons from the Soviets, and they were smuggled to him off the coast of Aden, Yemen.

The first high-level contacts between Moscow and the Palestinian revolution took place in 1968 at the suggestion of Egypt’s Gamal Abdel Nasser. Nasser and Arafat traveled to Moscow together on a secret visit. Two years later, a Soviet envoy met with Arafat in Jordan and the relations between the Palestinians and Soviets came out to the open.

Moscow realized the importance of relations with the Palestinians so it forged ties that allowed it in a few years to wield influence in Palestinian political and security decisions. Moscow formed close ties with the Palestinian left, including the PFLP, Democratic Front for the Liberation of Palestine and leftists in the Fatah movement.

These relations led the Palestinian resistance and allied parties in Lebanon to rule out the possibility of Israel invading Beirut. It had already launched its invasion on June 6, 1982, and was advancing on the capital. On the day of the invasion, the Fatah and Lebanese National Movement met in Beirut. Present were Abou Ammar, Abou Jihad, Abou Ayad, Abou al-Walid, Secretary General of the Lebanese Communist Party George Hawi and Secretary General of the Communist Action Organization in Lebanon Mohsen Ibrahim.

They discussed the possibility that the invasion could go beyond southern Lebanon, especially with Sharon as defense minister. They never predicted, however, that the Israeli forces would advance on Beirut and reach its outskirts because Syrian troops were in the capital and any clash with the Israelis could lead to a full-scale war between them. They believed that Israel would not provoke Syria, an ally of Moscow.

They were proven wrong when the Israeli army was met with little resistance and eventually besieged Beirut. It was later revealed that the Soviets and their allies did not have information about the Israeli plans. The Syrians were also in the dark.

Meeting with Bashir Gemayel

When the Israeli forces reached the Chouf area in Mount Lebanon and appeared intent on Beirut, a secret meeting was held between Abou Ammar al-Hassan, head of the Lebanese Forces Bashir al-Gemayel and Lebanese military intelligence chief Johnny Abdo. Gemayel wanted to hold the meeting to deliver a message to Arafat that the Palestinians must lay down their arms and leave Lebanon. “I am ready to secure a safe and dignified exit. I want an immediate answer before the Israelis reach Beirut,” he said. Hassan suggested that they take their conversation to the balcony because they feared Abdo’s house would be wiretapped.

Hassan noticed how worried Gemayel appeared. He told him: “Let me speak to you frankly. I follow you and it is my duty to follow you. I know you have presidential ambitions, but you won’t achieve them this way. You were the one who paved the way for the Syrians so that they could strike the Palestinians. Now, you have brought in the Israelis so that they can strike them both.”

“At the end of this game, we will both be struck, and you will be finished. Lebanon is enticing. Neither the Israelis, nor the Syrians will pull out. You are opposed to both of them. Let me repeat, you are mistaken in thinking this is the way that will lead you to the presidency. Your odds will be better if you decide to side with us and the Lebanese National Movement.”

“Who will agree to hosting the Palestinian fighters? Jordan, Syria or others? He vowed that he will ensure that a small number of fighters would remain and they would answer to the Lebanese army. The game slipped from his hands when the Israelis reached Beirut.”

Hassan later informed Mohsen about the meeting. Mohsen then met with Arafat and Hawi. They were primarily concerned with determining whether Moscow could stop the invasion. Hawi, with his close ties to the Soviets, believed that striking the Palestinian revolution was a red line for both sides the Soviets and Communists. After a month or so, he realized that everything was permissible, and nothing was off limits. Arab countries had no way of influencing international powers.

Hawi was hoping Moscow would threaten Israel to withdraw from Lebanon. He hoped they would send a naval vessel off the coast of Beirut or at least evacuate the wounded. Soviet ambassador to Beirut Alexander Soldatov could promise nothing of the sort. Hawi kept relaying these disappointing stances to Arafat. Hawi and others could not believe that the Soviets would stand idly by as Israel invaded Lebanon.

Arafat was dealt a crushing blow during a meeting with Soldatov. The ambassador told Arafat to leave Beirut, even if he had to board an American destroyer. Arafat was incredulous and refused to leave. He would eventually relent when it appeared that the Soviets would not support him or stand against the Israelis.



What Lies Ahead for Ukraine’s Contested Zaporizhzhia Nuclear Power Plant?

A Russian service member stands guard at a checkpoint near the Zaporizhzhia Nuclear Power Plant before the arrival of the International Atomic Energy Agency (IAEA) expert mission in the course of Russia-Ukraine conflict outside Enerhodar in the Zaporizhzhia region, Russian-controlled Ukraine, June 15, 2023. (Reuters)
A Russian service member stands guard at a checkpoint near the Zaporizhzhia Nuclear Power Plant before the arrival of the International Atomic Energy Agency (IAEA) expert mission in the course of Russia-Ukraine conflict outside Enerhodar in the Zaporizhzhia region, Russian-controlled Ukraine, June 15, 2023. (Reuters)
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What Lies Ahead for Ukraine’s Contested Zaporizhzhia Nuclear Power Plant?

A Russian service member stands guard at a checkpoint near the Zaporizhzhia Nuclear Power Plant before the arrival of the International Atomic Energy Agency (IAEA) expert mission in the course of Russia-Ukraine conflict outside Enerhodar in the Zaporizhzhia region, Russian-controlled Ukraine, June 15, 2023. (Reuters)
A Russian service member stands guard at a checkpoint near the Zaporizhzhia Nuclear Power Plant before the arrival of the International Atomic Energy Agency (IAEA) expert mission in the course of Russia-Ukraine conflict outside Enerhodar in the Zaporizhzhia region, Russian-controlled Ukraine, June 15, 2023. (Reuters)

The Zaporizhzhia nuclear power plant, Europe's largest, is one of the main sticking points in US President Donald Trump's peace plan to end the nearly four-year war between Russia and Ukraine. The issue is one of 20 points laid out by Ukrainian President Volodymyr Zelenskiy in a framework peace proposal.

Here are some of the issues regarding the facility:

WHAT ROLE MAY THE US PLAY?

Russia took control of the plant in March 2022 and announced plans to connect it to its power grid. Almost all countries consider that it belongs to Ukraine but Russia says it is owned by Russia and a unit of Russia's state-owned Rosatom nuclear corporation runs the plant.

Zelenskiy stated at the end of December that the US side had proposed joint trilateral operation of the nuclear power plant with an American chief manager.

Zelenskiy said the Ukrainian proposal envisages Ukrainian-American use of the plant, with the US itself determining how to use 50% of the energy produced.

Russia has considered joint Russian-US use of the plant, according to the Kommersant newspaper.

WHAT IS ITS CURRENT STATUS?

The plant is located in Enerhodar on the banks ‌of the Dnipro River and ‌the Kakhovka Reservoir, 550 km (342 miles) southeast of the capital Kyiv.

The Zaporizhzhia nuclear power plant has ‌six ⁠Soviet-designed reactors. They were ‌all built in the 1980s, although the sixth only came online in the mid-1990s after the collapse of the Soviet Union. It has a total capacity of 5.7 gigawatts, according to an International Atomic Energy Agency (IAEA) database.

Four of the six reactors no longer use Russian nuclear fuel, having switched to fuel produced by then-US nuclear equipment supplier Westinghouse.

After Russia took control of the station, it shut down five of its six reactors and the last reactor ceased to produce electricity in September 2022. Rosatom said in 2025 that it was ready to return the US fuel to the United States.

According to the Russian management of the plant, all six reactors are in "cold shutdown."

Both Russia and Ukraine have accused each other of striking the nuclear plant and of severing power lines to the plant.

The plant's equipment is powered by ⁠electricity supplied from Ukraine. Over the past four years these supplies have been interrupted at least eleven times due to breaks in power lines, forcing the plant to switch to emergency diesel generators.

Emergency generators ‌on site can supply electricity to keep the reactors cool if external power lines are cut.

IAEA ‍Director General Rafael Grossi says that fighting a war around a nuclear ‍plant has put nuclear safety and security in constant jeopardy.

WHY DOES RUSSIA WANT ZAPORIZHZHIA PLANT?

Russia has been preparing to restart the station but ‍says that doing so will depend on the situation in the area. Rosatom chief Alexei Likhachev has not ruled out the supply of electricity produced there to parts of Ukraine.

Oleksandr Kharchenko, director of the Energy Research Center in Kyiv, said Moscow intended to use the plant to cover a significant energy deficit in Russia's south.

"That's why they are fighting so hard for this station," he said.

In December 2025, Russia's Federal Service for Environmental, Technological and Nuclear Supervision issued a license for the operation of reactor No. 1, a key step towards restarting the reactor.

Ukraine's energy ministry called the move illegal and irresponsible, risking a nuclear accident.

WHY DOES UKRAINE NEED THE PLANT?

Russia has been pummeling Ukraine's energy infrastructure for months and some areas have had blackouts during winter.

In recent ⁠months, Russia has sharply increased both the scale and intensity of its attacks on Ukraine's energy sector, plunging entire regions into darkness.

Analysts say Ukraine's generation capacity deficit is about 4 gigawatts, or the equivalent of four Zaporizhzhia reactors.

Kharchenko says it would take Ukraine five to seven years to build the generating capacity to compensate for the loss of the Zaporizhzhia plant.

Kharchenko said that if Kyiv regained control of the plant, it would take at least two to three years to understand what condition it was in and another three years to restore the equipment and return it to full operations.

Both Ukrainian state nuclear operator Energoatom and Kharchenko said that Ukraine did not know the real condition of the nuclear power plant today.

WHAT ABOUT COOLING FUEL AT THE PLANT?

In the long term, there is the unresolved problem of the lack of water resources to cool the reactors after the vast Kakhovka hydro-electric dam was blown up in 2023, destroying the reservoir that supplied water to the plant.

Besides the reactors, there are also spent fuel pools at each reactor site used to cool down used nuclear fuel. Without water supply to the pools, the water evaporates and the temperatures increase, risking fire.

An emission of hydrogen from a spent fuel pool caused an explosion in Japan's Fukushima nuclear disaster in ‌2011.

Energoatom said the level of the Zaporizhzhia power plant cooling pond had dropped by more than 15%, or 3 meters, since the destruction of the dam, and continued to fall.

Ukrainian officials previously said the available water reserves may be sufficient to operate one or, at most, two nuclear reactors.


Egypt, Trump Reaffirm Strategic Alliance in 2025 amid Regional Turmoil

Egyptian President Abdel Fattah al-Sisi meets President Donald Trump ahead of a world leaders' summit on ending the Gaza war, in Sharm el-Sheikh, Egypt, October 13, 2025. (Reuters)
Egyptian President Abdel Fattah al-Sisi meets President Donald Trump ahead of a world leaders' summit on ending the Gaza war, in Sharm el-Sheikh, Egypt, October 13, 2025. (Reuters)
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Egypt, Trump Reaffirm Strategic Alliance in 2025 amid Regional Turmoil

Egyptian President Abdel Fattah al-Sisi meets President Donald Trump ahead of a world leaders' summit on ending the Gaza war, in Sharm el-Sheikh, Egypt, October 13, 2025. (Reuters)
Egyptian President Abdel Fattah al-Sisi meets President Donald Trump ahead of a world leaders' summit on ending the Gaza war, in Sharm el-Sheikh, Egypt, October 13, 2025. (Reuters)

After months of speculation over the trajectory of Egyptian-US relations, fueled by persistent talk of strain and an impending rift, a high-level meeting between President Donald Trump and President Abdel Fattah al-Sisi in Sharm el-Sheikh reaffirmed the resilience of the strategic alliance between Cairo and Washington, even as the region remains in turmoil.

The meeting followed a turbulent period marked by Trump’s adoption of a proposal to relocate Gaza’s population, an idea firmly rejected by Sisi and one that prompted warnings of a diplomatic crisis between the two longtime allies.

The subsequent signing of a Gaza peace agreement in Sharm el-Sheikh sent a clear signal that, despite sharp disagreements over policy, the foundations of the bilateral relationship remain intact.

Early in Trump’s second term, media reports said Sisi had scrapped plans to visit Washington. As the year draws to a close, speculation has said that the visit may happen. Trump has acknowledged Sisi as a friend and said he would be happy to meet him as well.

Trump’s election victory late last year raised Egyptian hopes of strengthening the strategic partnership. Sisi voiced that expectation in a congratulatory post on X, stating that he looked forward to working together with Trump to achieve peace, preserve regional peace and stability, and strengthen the strategic partnership.

Those hopes were tested when Trump floated a plan to “clean out Gaza” and relocate its residents to Egypt and Jordan. Cairo rejected the idea outright, mobilized international opposition, unveiled an alternative plan for Gaza’s reconstruction and hosted an emergency summit on the issue in March.

Limited public engagement

David Butter, a research fellow in the Middle East and North Africa program at Chatham House, noted that the striking feature of Egypt-US ties over the past year has been their low public profile.

Aside from Trump’s appearance in Sharm el-Sheikh, there was not much happening in the open, he told Asharq Al-Awsat.

Amr Hamzawy, an Egyptian political scientist and director of the Middle East program at the Carnegie Endowment for International Peace, described the first year of Trump’s second term as difficult for bilateral relations.

He said it began with talk of displacement and a “Middle East Riviera” in Gaza, but Egyptian diplomacy succeeded in shifting the trajectory.

Trump’s peace plan, he said, ultimately signaled rejection of displacement and spoke of security and political tracks for Gaza and a broader political process for the Palestinian issue, though details remain unclear.

Hamzawy added that the year opened from a tough starting point that followed what he called President Joe Biden’s hesitant stance on Gaza, when displacement was first discussed.

After nearly a year of Egyptian political and diplomatic effort, he said, displacement dropped from Washington’s agenda, even if it remains a risk that cannot be ignored.

Historically, Egypt has been a pivotal state for US national security, given its geography, demographic weight and diplomatic role, according to a recent report by the Congressional Research Service.

Gaza, the main test

The Gaza war shaped Egyptian-US relations during Trump’s first year back in office. Washington backed Egyptian-Qatari mediation to halt the war. US Secretary of State Marco Rubio thanked Cairo after a truce was reached between Israel and Hamas in January.

When hostilities resumed, however, Egypt faced complex diplomatic choices with both Washington and Israel. It rejected Trump’s call to resettle Gaza’s population, while its reconstruction plan failed to gain US or Israeli acceptance.

Cairo also drew criticism from Trump for declining to join US strikes against Yemen’s Houthis, the Congressional Research Service (CRS) revealed.

Butter noted that ties with the Trump administration were strained over Gaza after Sisi canceled a Washington visit early in the year, following Trump’s “Middle East Riviera” remarks, which left contacts at a minimum.

He said Trump’s Sharm el-Sheikh visit, the signing of the Gaza agreement and the celebration of his plan’s success offered a chance to reset relations. Egypt, he added, has become indispensable to Trump’s administration in Gaza.

Hamzawy said Gaza dominated the first year of Trump’s term, giving Egypt a chance to restore its standing with US and European decision-makers as a key mediator. Cairo put its vision on the table, he said, shifting US thinking toward parallel security and political tracks and from talk of disarmament to limiting weapons.

Throughout the year, Egypt publicly counted on Trump to end the Gaza war. In July, Sisi urged him in a televised address to press for a halt, saying Trump was capable of doing so.

Analysts Daniel Byman and Jon Alterman wrote in Foreign Policy that Egypt is indispensable to international responses to the Gaza war, even if it remains a difficult partner for Washington and Israel. The conflict, they said, restored diplomatic focus on Egypt and strengthened its leverage.

Sara Kira, director of the European North African Center for Research, said relations in Trump’s second term differ from his first. The earlier term saw broad alignment and personal warmth from Trump, particularly on counterterrorism, she said. The second term has been marked by divergence.

That surfaced in April when Trump called for free passage for US commercial and military vessels through the Suez Canal in exchange for US efforts to protect the waterway.

Positive signals despite differences

Despite disagreements over Gaza, there were positive signs elsewhere. Early in the year, the US State Department froze new funding for most aid programs worldwide, exempting humanitarian food programs and military aid to Israel and Egypt.

Washington did not include Egypt on a travel ban list issued in June. Trump said Egypt was a country with which the United States dealt closely and that things there were under control. Egypt was also spared higher US tariffs. Cairo has repeatedly stressed the depth and resilience of the strategic relationship.

Kira said Egypt exerted maximum pressure to achieve peace and stop the Gaza war, eventually convincing Washington of its approach and reaching a peace agreement in Sharm el-Sheikh. She said Egypt acted pragmatically and astutely, reading Trump’s personality and US interests.

As talks on the second phase of the Gaza agreement stall, Egypt continues to rely on the Trump administration to advance its plan. Cairo remains in contact with Washington and is working with it to prepare a donor conference for Gaza’s reconstruction, which has yet to receive sufficient momentum from the Trump administration.

The dialogue extends beyond Gaza to Libya, Sudan, Lebanon and Iran, as well as water security, led by Ethiopia’s Grand Ethiopian Renaissance Dam (GERD), which Egypt fears could affect its Nile water share.

GERD

In mid-June, Trump stirred controversy in Egypt when he wrote on Truth Social that the United States had “stupidly” funded the dam Ethiopia built on the Blue Nile, triggering a severe diplomatic crisis with Egypt.

In August, the White House released a list of Trump’s foreign policy achievements, which included a purported agreement between Egypt and Ethiopia over the dam.

Trump has repeatedly spoken of his administration’s efforts to resolve the dispute, but those claims have yet to translate into concrete action.

Hamzawy said there is an opportunity for Washington to mediate and revive an agreement reached near the end of Trump’s first term.

Charles Dunne of the Arab Center Washington DC wrote recently that Trump’s stance may please Cairo but could also produce adverse outcomes if Washington does not assume a mediation role.

The United States hosted talks with the World Bank in 2020 during Trump’s first term, but they failed after Ethiopia refused to sign the draft agreement.

Military ties endure

Military cooperation continued largely as usual. Since 1946, the United States has provided Egypt with about $90 billion in aid, with a sharp increase after 1979, which successive administrations have framed as an investment in regional stability, according to the CRS.

For more than a decade, Congress has imposed human rights conditions on part of Egypt’s aid.

Between fiscal years 2020 and 2023, the Biden administration and Congress withheld approximately $750 million in military funding. Trump’s technical annex to the proposed fiscal 2026 budget seeks $1.3 billion in military assistance for Egypt without conditions, the CRS said.

Hamzawy said the administration is far from imposing conditionality, noting that relations rest on mutual interests between a major power and a positively influential middle power.

Since the Gaza war, the Biden and Trump administrations have accelerated US arms sales to Egypt. The State Department notified Congress of military sales totaling $7.3 billion. In July, the Pentagon announced that the State Department had approved the sale of an advanced air defense missile system to Egypt, valued at approximately $4.67 billion. Egypt also hosted the Bright Star military exercises in September.

Kira said ties with Washington are driven by interests and that Cairo has positioned itself as a core regional player.

Hamzawy said Egypt occupies a central place in US Middle East thinking, as Washington needs a spectrum of allies, with Egypt at the heart of that network.


Why Metal Prices are Soaring to Record Highs

A salesman displays gold chains at an Indian jewelry store in September. Idrees MOHAMMED / AFP
A salesman displays gold chains at an Indian jewelry store in September. Idrees MOHAMMED / AFP
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Why Metal Prices are Soaring to Record Highs

A salesman displays gold chains at an Indian jewelry store in September. Idrees MOHAMMED / AFP
A salesman displays gold chains at an Indian jewelry store in September. Idrees MOHAMMED / AFP

Precious and industrial metals are surging to record highs as the year ends, driven by economic and geopolitical uncertainty, robust industrial demand and, in some cases, tight supply.

Below AFP examines the reasons for the surge in demand.

- Safe havens -

Gold and silver are traditionally seen as safe-haven assets, and demand has soared amid mounting geopolitical tensions, from US President Donald Trump's tariffs onslaught to wars in Ukraine and Gaza, as well as recent pressure by Washington on Caracas.

Investors are also uneasy about rising public debt in major economies and the risk of a bubble in the artificial intelligence sector.

These uncertainties are driving up gold and silver, with other metals now starting to see the impact as investors seek to diversify their portfolios, explained John Plassard, an analyst at Cite Gestion Private Bank.

"Metal is once again becoming insurance rather than just a speculative asset," he told AFP.

- A weak dollar -

Traditional safe havens like the dollar and US Treasuries have become less attractive this year.

Uncertainty around Trump's presidency and the prospect of further Federal Reserve interest rate cuts, have weakened the dollar, reducing its appeal to investors.

As a result, many investors are turning to gold and silver.

Gold has climbed more than 70 percent this year and passed $4,500 an ounce for the first time on Wednesday, while silver reached a record high of $72 an ounce, with prices up about 2.5 times since January.

A weak dollar is also boosting industrial metals, since commodities priced in dollars become cheaper for buyers when the currency falls.

- Fresh demand -

Industrial demand has surged in recent months, driven by the rise of artificial intelligence and the energy transition.

Copper, used for solar panels, wind turbines, electric vehicle batteries and data centers, has seen strong gains as a result.

Prices hit a record on Wednesday, topping $12,000 a ton, helped further by China, the world's largest copper consumer, announcing new measures to boost demand.

Aluminium, a cheaper alternative to copper, and silver are also benefiting from the AI boom and the shift to renewable energy.

Platinum and palladium, used in car catalytic converters, have also risen, reaching a record high and a three-year high respectively, after the European Union decided to allow sales of new internal combustion vehicles beyond 2035.

- Tight supply -

Copper prices have been lifted this year by fears of US tariffs, prompting companies to stockpile ahead of their introduction, with duties imposed on semi-finished products and potentially extending to refined copper.

Supply risks from disruptions at mines in the Democratic Republic of Congo, Chile and Indonesia have added to the price surge.

Physical markets for silver, platinum, and aluminium are also tight.

According to Ole Hansen, an analyst at Saxo Bank, thin holiday trading, which increases volatility, and investor fear of missing out have further amplified the rise at the end of the year.