Gold and silver ended the year with heavy swings after a powerful rally. Both metals moved toward their strongest annual gains since 1979. Trading stayed volatile until the final sessions. Investors reacted to interest rate signals, political tension, and unstable markets.
Gold prices rose by more than 60 percent over the year. The metal climbed to a record level above 4,549 dollars per ounce. Prices slipped after Christmas. Gold traded near 4,330 dollars per ounce on New Year’s Eve.
Silver followed a similar pattern. Prices settled around 71 dollars per ounce at year end. Earlier in the week, silver reached an all-time high of 83.62 dollars per ounce.
Policy outlook drives precious metal demand
Several forces pushed prices sharply higher this year. Investors positioned for future interest rate cuts and strong demand. Analysts warned that rapid gains increase correction risks. Extreme rallies often create instability.
Rania Gule from trading platform XS.com described a combination of drivers. Economic trends, investment flows, and geopolitical risks moved together. These forces lifted gold and silver prices throughout the year.
Gule said expectations of further US rate cuts in 2026 played a major role. Central banks increased gold purchases steadily. Investors also favored safe-haven assets amid global uncertainty and economic stress.
Market anxiety strengthens safe-haven appeal
Dan Coatsworth from investment platform AJ Bell highlighted defensive behavior. Inflation fears pushed investors toward precious metals. Volatile equity markets reinforced that shift.
Coatsworth said the market backdrop looked similar entering 2026. High government debt remained a concern in the UK and the US. Tariff plans linked to Donald Trump added pressure. Fears of a potential artificial intelligence bubble unsettled investors.
These risks could keep sentiment positive toward gold and silver. Coatsworth warned that recent performance increased vulnerability. Strong gains in 2025 raised the chance of pullbacks.
Strong rallies increase selling pressure
Coatsworth said market stress could trigger rapid selling. Investors often liquidate assets with strong recent returns. Gold fits that description and trades easily.
Rania Gule expects gold prices to rise further in 2026. She forecast steadier and slower gains. 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 buying. Official demand continued to support prices.
Silver lifted by supply limits and industry demand
Daniel Takieddine of Sky Links Capital Group pointed to silver-specific drivers. Tight supply and industrial demand pushed prices higher. Government decisions added further pressure.
China announced restrictions on silver exports. The country stands as the world’s second-largest producer. In October, the Ministry of Commerce confirmed new 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 depend on silver.
Investment funds amplify market moves
Takieddine also highlighted strong investment inflows. Large sums entered 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 trading in gold and silver.
Takieddine said silver could rise again next year. He urged caution despite optimism. Strong rallies may still face sharp corrections.
