Lebanon’s Crisis on Verge of Inevitable Confrontation

Former Lebanese Prime Minister Saad Hariri. (Reuters)
Former Lebanese Prime Minister Saad Hariri. (Reuters)
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Lebanon’s Crisis on Verge of Inevitable Confrontation

Former Lebanese Prime Minister Saad Hariri. (Reuters)
Former Lebanese Prime Minister Saad Hariri. (Reuters)

The crisis that Lebanon is witnessing today due to the resignation of Prime Minister Saad Hariri is unlike any other the country has experienced in its history. Despite the analysis and debate over his motives, his resignation speech was clear in stipulating the reasons that prompted him to step down.

“Hezbollah” and its backer Iran are the direct reason for what is happening in Lebanon, a year after the “settlement” that saw the election of Michel Aoun as president and appointment of Hariri as premier.

So what will happen now, given that the president has not yet approved the PM’s resignation and the “Hezbollah” and its allies’ refusal to examine the reasons why Hariri rsigned. The party’s rivals believe that Lebanon has reached “the point of no return” and that the main focus should be on disarming it.

Nasrallah’s response

In his reaction to Hariri’s resignation, “Hezbollah” chief Hassan Nasrallah overlooked, as did others from the party, the causes for his decision. They instead focused on superficial aspects of his speech, tossing the ball of finding a solution to the crisis in Aoun’s court and holding Saudi Arabia accountable.

Nasrallah stated that the Lebanese government “had made achievements and it could have accomplished more had it been allowed to continue.” He also claimed that the party is “keen on Lebanon’s stability,” saying that there was no cause for concern.

He also called for preserving security and civil peace in a region that is boiling with political crises.

Mustaqbal Movement MP Ahmed Fatfat slammed Nasrallah’s speech, labeling it a “declaration of war.”

Head of the Mustaqbal parliamentary bloc MP Fouad Saniora meanwhile said that the “settlement” is over, explaining that “Hezbollah” and its ally, the Free Patriotic Movement, had exploited it to make gains at Lebanon’s expense.

Hariri chose to step down after months of attempts to steer Lebanon clear of problems created by “Hezbollah’s” meddling in the affairs of Arab countries at Iran’s bidding.

“The solution lies in returning to the Taif Accord and constitution and restoring the authority of the Lebanese state,” he explained.

Saudi Arabia's Minister of State for Gulf affairs, Thamer al-Sabhan had announced earlier this week that Riyadh will deal with the Lebanese government as one that had declared war on the kingdom.

He held Hariri’s government responsible for failing to deter “Hezbollah” from its harmful actions, vowing: “There is someone that will deter it and make it return to its caves in southern Lebanon.”

He urged the Lebanese to become aware of these dangers and work to avert them before they reach the “point of no return.”

Saudi Foreign Minister Adel al-Jubeir blamed “Hezbollah” for Hariri’s resignation, “who had had enough and we completely support him in his decision.”

“It was clear that ‘Hezbollah’ was holding him back in every regard and that the party was implementing Iranian dictates,” he continued.

Aoun’s position

At a time when the majority of political powers in Lebanon believe that the settlement in the country has collapsed, presidential sources said that it was too soon to speak of that.

Saudi sources told Asharq Al-Awsat that Hariri had demanded that political understandings be reached in exchange for blessing Aoun’s election as president last year. These demands include “Hezbollah’s” withdrawal from Syria and refraining from carrying out hostile acts in Yemen and the Arab Gulf and that Hariri and Aoun would work to that end.

None of this materialized however, on the contrary, Lebanon found itself in the Iranian fold, noted the sources. There was talk of a one-year deadline to achieve those goals, but none of that happened.

“Lebanon did not adhere to its policy of disassociation, its ministers visited Syria and normalized ties with the regime. ‘Hezbollah’ was involved in security unrest in Kuwait and launched ballistic missiles from Yemen,” added the sources.

Furthermore, they revealed that Hariri had informed Riyadh in recent months that his “security guards’ telecommunications equipment twice did not have reception while passing through certain areas.”

The PM had spoken of a plot to assassinate him when he announced his resignation a week ago.

“Hezbollah” arms

The PM also accused Iran of violating Lebanon and establishing a “state within a state”, which now has the final say in local affairs. He also pointed to “Hezbollah” imposing its will through its weapons.

The Iranian Foreign Ministry said that the resignation was the announcement of a “new scenario to create tensions in Lebanon and the region.”

In wake of these developments, Lebanese Forces media officer Charles Jabbour and Director of the Levant Institute for Strategic Affairs in Beirut Dr. Sami Nader said that “Hezbollah” and its arms are now the main obstacle in finding any solution to the crisis. Former deputy Prime Minister and “Hezbollah” supporter Elie Firzli linked the party’s weapons to Israel. He called on the international community “to end Israeli occupation before demanding that the party disarm.”

He told Asharq Al-Awsat that returning affairs to normal requires rationality, asking: “How can we demand that the party be targeted when Israel itself could not confront it?”

“The arms have been in its possession for years. Today, instead of targeting them, we should focus on strengthening the state, according to the constitution and Taif Accord, which would restore calm and ease the need for arms. Once this is achieved, we can shift discussions towards its weapons.”

The Taif Accord can be “saved” through reappointing Hariri as premier so that the government can stage the parliamentary elections that are scheduled for May, he explained.

Sunni representation

As Aoun bides his time in calling for parliamentary consultations to name a prime minister, all sides are convinced that it would be difficult to find a Sunni figure willing to take Hariri’s position.

Head of the Marada Movement MP Suleiman Franjieh announced that he refuses the appointment of a figure “who challenges the Sunnis”. Head of the Democratic Gathering MP Walid Jumblat said that the best solution for a Lebanon’s stability is the current national unity government.

These are views shared by Aoun, whose sources said it was too soon to talk about a government that does not enjoy “Hezbollah” representation.

Neutral government

Jabbour remarked that it was impossible to form a new government, regardless of its composition, at this current time.

Nader meanwhile stated that the “neutral” government was needed to complete the preparations for the parliamentary elections. He warned that Lebanon would be faced with an open political confrontation if “Hezbollah” is excluded from cabinet.

Jabbour told Asharq Al-Awsat that it was “impossible” to form a government with “Hezbollah” representation because this issue has “become a red line on the regional and international scenes.”

The party in turn refuses to be excluded from any cabinet because it will be therefore kept out of rule. Any attempts otherwise could be confronted with its weapons, warned Jabbour.

Given the above, it appears that Lebanon is headed towards an open crisis that requires non-traditional solutions.

He pointed to late former Minister Mohammed Shatah’s proposal to wait for the success of the nuclear deal between Iran and world powers and use it as a framework to tackle “Hezbollah’s” weapons. The LF official said that Shatah was assassinated in 2013 for making such a demand.

Eyes are now turned to Iran and how it will deal with the developments after “Hezbollah’s” arms have become part of international and regional affairs.

Hilal Khashan, a professor of political science at the American University of Beirut, told AFP that Lebanon does not have a government with Hariri no longer in power. This therefore entails that “Hezbollah” is not represented in it, which means that any attack against the party will not be directed against the Lebanese state.

Months ago, al-Sabhan had called for forming an international coalition against “Hezbollah” and against simply making due with US sanctions against it.

Nader meanwhile said that the developments “demand more than just a settlement.”

Others should support Hariri’s stance after he had announced that the other camp had abandoned the settlement and dragged Lebanon in the Iranian axis and imposed the normalization of ties with the Syrian regime, he explained.

He therefore said that the Lebanon is now open to all political and economic options. He also did not rule out the possibility that “Hezbollah” would take an escalatory measure similar to what happened on May 7, 2008, when it took over Beirut. He did not rule out the chance that the party may also form a one-sided government, which violates the constitution and reason, and place Lebanon in total isolation.

Subsequent political crises

Lebanon has witnessed since 2005 numerous political crises, especially due to the divide between the Hariri and “Hezbollah” camps. Tensions usually culminate in security unrest through assassinations and armed clashes.

Amid the turbulence in Lebanon, some observers believe that Hariri’s resignation breathes life into the opposition camp against “Hezbollah”. It could be an opportunity to revive the “Cedar Revolution” and “March 14 camp,” which was born after the assassination of former Prime Minister Rafik Hariri on February 14, 2005.

This view was expressed by former aide to US President Donald Trump Walid Fares and March 14 General Secretariat coordinator Fares Soaid.

Soaid told Asharq Al-Awsat: “We should first acknowledge that the settlement that prevented the formation of a Lebanese opposition collapsed with Hariri’s resignation.”

He did acknowledge that the March 14 alliance that was formed after Rafik Hariri’s assassination had collapsed, but he did stress that a “national voice should be formed against Iranian hegemony over Lebanon.”

This national initiative is being prepared and it will bring together figures that oppose “Hezbollah” and Iran. He revealed that it will be officially announced “soon.”

Is the opposition ready?

Asked if the opposition in Lebanon is able to share Hariri’s stance and confront “Hezbollah’s” arms, Soaid replied: “In 2005, the Syrian regime was kicked out of Lebanon at a time when the national will was stronger than the Arab and international one. Today the situation is reversed. We now need to form a national will to meet this reawakening.”

After its launch, the new initiative will communicate with all Lebanese factions that share its views in order to lead Lebanon and the region towards a new phase, he remarked.

Fares, for his part, said during a televised appearance that the Lebanese opposition should play its role and not wait on the international community.

The court is now in the opposition’s court and it shares the views of the international community, he noted.

It will also enjoy the backing of the United States if it mobilizes in contrast to the past when it used to voice it objection to Iran and “Hezbollah’s” arms before then joining the party in government.

He ruled out the possibility of an Israeli war or American military intervention in Lebanon, adding however that the Lebanese opposition was to blame for failing to confront “Hezbollah’s” possession of arms.



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.