Gold and silver prices experienced a volatile end to the year, despite being on track for their strongest annual gains since 1979.
Gold surged by more than 60% during 2025, reaching a record high above $4,549 per ounce before retreating after Christmas. By New Year’s Eve, gold was trading at around $4,330 an ounce.
Silver followed a similar pattern, trading at approximately $71 an ounce at year-end, after hitting an all-time high of $83.62 earlier in the week.
What drove the surge in precious metals
The sharp rise in precious metals prices during 2025 was driven by a combination of economic, investment and geopolitical factors. These included expectations of further interest rate cuts, increased gold purchases by central banks and heightened demand for so-called safe-haven assets amid global tensions and economic uncertainty.
Market analysts pointed to expectations that the US Federal Reserve may cut interest rates again in 2026 as a key driver supporting higher gold prices.
Central banks worldwide also added hundreds of tonnes of gold to their reserves over the year, according to data from the World Gold Council.
Silver boosted by supply concerns and industrial demand
Silver prices were further supported by tight supply conditions and strong industrial demand. China, the world’s second-largest silver producer, announced restrictions on silver exports, alongside tungsten and antimony, citing the need to strengthen resource and environmental protection.
The move raised concerns among industry figures, particularly due to silver’s role in manufacturing and technology-related processes.
Significant inflows of investment capital also contributed to the rally, particularly through exchange-traded funds, which allow investors to gain exposure to precious metals without holding physical bullion.
Outlook for 2026
Looking ahead, analysts expect gold prices to continue rising in 2026, though at a more moderate and stable pace compared to the record highs seen in 2025.
Silver may also see further gains in the coming year, although market participants caution that any rallies could be followed by sharper corrections due to ongoing volatility.
Also read: Cyprus politics of 2025: the year in review
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