Gold and silver ended the year with sharp volatility following a historic rally. Both metals posted their strongest annual gains since 1979. Trading stayed unstable in the final sessions. Investors reacted to interest rate signals, geopolitical tensions, and fragile markets.
Gold prices rose more than 60 percent over the year. The metal reached a record high above 4,549 dollars per ounce. Prices retreated after Christmas. Gold traded near 4,330 dollars per ounce on New Year’s Eve.
Silver experienced similar turbulence. The metal traded around 71 dollars per ounce at year end. Earlier in the week, silver climbed to an all-time high of 83.62 dollars per ounce.
Interest rate outlook drives metals higher
Several factors pushed precious metals upward during the year. Investors bet on future interest rate cuts and strong demand. Analysts warned that rapid gains often carry correction risks. Sharp rallies can reverse quickly.
Rania Gule from trading platform XS.com highlighted overlapping drivers. Economic trends, investment flows, and geopolitical tensions combined. These forces lifted gold and silver prices throughout the year.
Gule said expectations of further US rate cuts in 2026 played a key role. Central banks steadily increased gold purchases. Investors also sought safe-haven assets amid global uncertainty and economic stress.
Inflation concerns reinforce safe-haven demand
Dan Coatsworth from investment platform AJ Bell pointed to defensive positioning. Inflation fears drove investors toward precious metals. Volatile stock markets reinforced that trend.
Coatsworth said the market backdrop looked largely unchanged entering 2026. High government debt weighed on confidence in the UK and US. Tariff proposals linked to Donald Trump added pressure. Concerns about a potential artificial intelligence bubble unsettled investors.
These factors could keep gold and silver in favor. Coatsworth warned that strong performance increased vulnerability. Exceptional gains in 2025 raised the chance of pullbacks.
Rally leaves gold exposed to selling pressure
Coatsworth said market stress could trigger fast liquidation. Investors often sell assets with strong recent returns first. Gold fits that profile and trades easily.
Rania Gule expects gold prices to continue rising in 2026. She forecast steadier and more controlled growth. Prices may stabilize after the extremes seen in 2025.
Central banks worldwide added hundreds of tons of gold this year. The World Gold Council reported sustained accumulation. Official demand continued to support prices.
Silver boosted by supply limits and industrial use
Daniel Takieddine of Sky Links Capital Group highlighted silver-specific drivers. Tight supply and industrial demand pushed prices higher. Policy decisions added further pressure.
China announced restrictions on silver exports. The country ranks as the world’s second-largest producer. In October, the Ministry of Commerce confirmed export controls. Officials cited resource protection and environmental priorities.
Elon Musk reacted publicly to the decision. He warned about industrial consequences. He said many manufacturing processes rely heavily on silver.
ETFs drive inflows and market momentum
Takieddine also pointed to strong investment activity. Large sums flowed into precious metals through exchange-traded funds. These vehicles increased market access.
ETFs bundle assets and trade like single shares. Investors avoid handling physical bullion. This structure simplified exposure to gold and silver.
Takieddine said silver could rise again next year. He urged caution despite optimism. Strong rallies may still face sharp corrections.
