Gold surged above US$4,500 per ounce on Friday, marking a 6 percent gain amid a year of strong investor demand and geopolitical uncertainty. At Christmas Eve close, gold traded at US$4,486 per ounce, while platinum stood at US$2,289 per ounce.
The rally represents gold’s biggest annual gain since 1979, driven by Federal Reserve policy easing, rising central bank purchases, increasing ETF holdings, and a broader trend of de-dollarisation, according to market analysts cited by Reuters.
Silver has also experienced unprecedented growth, breaking past US$75 per ounce for the first time. Strong industrial and investment demand, supply shortages, its recent designation as a critical mineral by the United States, and momentum-driven buying have fueled the surge.
Spot silver has gained over 150 percent year-to-date, far outpacing gold’s roughly 70 percent rise, highlighting renewed investor appetite for precious metals as a hedge against economic uncertainty.
Analysts say the metals’ rally reflects a combination of safe-haven buying and growing recognition of their industrial and strategic value, positioning both gold and silver for continued market attention heading into 2026.
Gold prices have surged dramatically in 2025, with the benchmark contract climbing above US$4,500 per ounce — an unprecedented level in the modern market. This rally marks the strongest annual performance for gold since 1979, when geopolitical upheaval and monetary volatility drove bullion to record nominal levels.
Several key drivers have fuelled the 2025 gold rally:
1. Expectations of Monetary Policy Easing
Market expectations that major central banks notably the U.S. Federal Reserve will continue to cut interest rates in 2026 have lifted gold prices. Lower benchmark rates reduce the opportunity cost of holding non‑yielding assets like gold, making bullion a more attractive store of value.
Analysts have linked softer U.S. inflation data and higher unemployment figures to renewed expectations of rate cuts, driving fresh inflows into gold.
2. Geopolitical Tensions and Uncertainty
Heightened geopolitical risks, including ongoing conflicts and supply chain disruptions, have reinforced gold’s appeal as a safe haven. Investors typically flock to gold during times of global uncertainty, supporting prices even as other asset classes fluctuate.
3. Central Bank Buying
Central banks around the world — particularly in emerging markets — have been net buyers of gold in recent years, adding to official reserves as a way to diversify away from the U.S. dollar. This demand has been an important underpinning for prices.
4. Growing ETF Holdings
Exchange‑traded funds backed by physical gold have seen strong inflows in 2025, signalling robust investor interest. Rising ETF holdings are a key indicator of institutional and retail demand for gold as both a hedge and strategic allocation.
5. De‑Dollarisation Trends
A broader shift toward de‑dollarisation in parts of the global economy including increased use of alternative currencies for trade and finance has supported gold’s safe‑haven status. As confidence in the long‑term stability of any single currency fluctuates, gold’s role as a neutral reserve asset has been reinforced.
Silver’s Exceptional Rise
Silver has dramatically outperformed gold in 2025, climbing over 150 percent year‑to‑date and breaking above US$75 per ounce for the first time in history. While gold remains a traditional safe haven, silver’s rally has been driven by both investment demand and fundamental industrial use especially in renewable energy technologies, electronics, and automotive components.
Silver’s designation as a “critical mineral” by the United States has further bolstered investment interest, as governments and investors alike emphasize strategic supply chains for industrial metals.
Historical Context
Before this year’s surge, gold hit record highs in October 2024, surpassing previous peaks set during periods of crisis such as the 2008 global financial crash and the early months of the COVID‑19 pandemic in 2020. The gains in 2025 have far exceeded the typical year‑end seasonal uptick, reflecting structural and cyclical forces simultaneously lifting the market.
Outlook
While precious metal price movements can be volatile, many analysts expect elevated gold and silver prices to persist into 2026 if current drivers’ monetary policy, geopolitical risk, central bank purchases, and investment flows remain in place. Continued debate over inflation, currency stability and global growth prospects will keep bullion at the forefront of asset allocation discussions.
