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Gold and silver markets concluded the year with notable volatility, capping off what is projected to be their most substantial annual gains since 1979.
The price of gold surged over 60% during the year, achieving a record peak above $4,549 (£3,378) per ounce before receding post-Christmas to approximately $4,330 by the close of trading on New Year’s Eve.
Concurrently, silver traded around $71 per ounce, following a peak of $83.62 on Monday, marking an all-time high.
These gains were fueled by multiple factors, notably anticipations of further interest rate reductions. However, experts caution that the year’s sharp price escalations could precipitate a price correction for both gold and silver in 2026.
“The prices of gold and silver have experienced a significant upswing driven by the confluence of economic, investment, and geopolitical influences,” stated Rania Gule, analyst at trading platform XS.com.
She further noted that the primary catalyst for precious metal price increases is the market’s expectation of further interest rate cuts by the U.S. Federal Reserve in 2026. Central bank gold acquisitions and investor appetite for “safe haven” assets, prompted by global tensions and economic uncertainties, also bolstered gold and silver prices.
Dan Coatsworth, Head of Markets at investment platform AJ Bell, observed that the elevated gold and silver prices have been driven by investors “gravitating towards precious metals amid inflation concerns” and volatile equity markets.
“The prevailing market dynamics appear consistent as we enter 2026,” he added.
Coatsworth suggested that considerable government debt in both the UK and US, coupled with potential tariffs from Donald Trump and anxieties surrounding a possible AI bubble, could incentivize investors to “maintain a bullish stance on gold and silver.”
However, he also cautioned that the substantial gains recorded in 2025 leave these assets susceptible to a significant pullback in the coming year.
“Should financial markets encounter a period of turbulence, investors seeking to reduce their positions might initially target assets that have generated substantial returns in the recent past or those that are readily liquidatable. Gold satisfies both criteria,” he explained.
Gule anticipates a continued upward trend for gold in 2026, albeit “at a more moderated pace compared to the record-breaking highs observed in 2025.”
Moreover, central banks globally have collectively added hundreds of tons of gold to their reserves throughout the year, according to data from the World Gold Council.
Daniel Takieddine, Co-Founder of investment firm Sky Links Capital Group, highlights “constrained supply and robust industrial demand” as factors contributing to silver’s price appreciation.
China, a major silver producer, has announced restrictions on silver exports.
In October, China’s Ministry of Commerce implemented new export restrictions on silver, tungsten, and antimony, citing the need “to enhance resource and environmental protection.”
Responding to social media commentary regarding Chinese government limitations on silver exports, Tesla CEO Elon Musk stated, “This is not good. Silver is crucial in numerous industrial processes.”
Takieddine also emphasized the substantial capital inflow into precious metals via investment vehicles such as exchange-traded funds (ETFs).
ETFs, which represent a diversified portfolio of assets, trade on stock exchanges like individual stocks. They offer a convenient avenue for precious metal investment without requiring investors to physically hold bullion.
Takieddine suggests that silver possesses the potential for further gains in the coming year. However, he cautions that “rallies could be succeeded by sharper corrections.”
Investors are flocking to precious metals amid geopolitical tensions and expectations of more US interest rate cuts.
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Analysts point to delays in the reporting of economic data due to the US government shutdown as one reason for the rise.
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