Gold and Silver Smash Historic Price Records

The global search for safety has accelerated into a full-blown commodities super-cycle as we approach the end of 2025. In a move that has stunned capital markets, gold prices have shattered the psychological ceiling, trading above $4,400 per ounce for the first time in history. This rally is not merely a short-term fluctuation, but a structural shift driven by expectations of Federal Reserve policy easing in 2026 and persistent geopolitical friction.

Gold started the year trading at a modest $2,600, but a combination of "Trump tariffs", trade wars, and market anxiety has fuelled a relentless ascent. According to market data, the yellow metal has surged more than 68 per cent year-to-date, marking its most significant annual percentage gain since 1979. This historic run suggests that institutional capital is aggressively rotating out of fiat-dependent assets and into tangible stores of value.

The primary driver behind this momentum is the dual force of US monetary policy and political unpredictability. Analysts broadly concur that the Federal Reserve is poised to cut interest rates twice in 2026. As yields on US Treasuries and other sovereign bonds decline, the opportunity cost of holding non-yielding assets like gold diminishes, making them increasingly attractive for portfolio diversification.

However, the political dimension cannot be ignored. The aggressive trade policies enacted by the US administration have created an environment of volatility that benefits safe-haven assets. As Adrian Ash, director of research at BullionVault, noted, "The precious metals market says that President Trump has really triggered something – and gold has gone crazy this year." He added that the combination of trade wars and attacks on the Federal Reserve has created a perfect storm for metals, stating, "All of those provocations come from Trump."

While gold grabs the headlines, silver has quietly delivered even more explosive returns. The metal hit a record high of $69.44 per ounce on Monday, pushing its year-to-date gains to a staggering 138 per cent. Unlike gold, which is primarily a monetary asset, silver benefits from a dual mandate: it is both a safe haven and a critical industrial component.

Analysts point to strong manufacturing demand coupled with supply constraints as the catalyst for silver's outperformance. Platinum is also riding this wave, currently sitting at a 17-year high. This broad-based rally across the precious metals complex indicates that investors are not just hedging against inflation; they are betting on a fundamental repricing of hard assets in a resource-constrained world.

A critical, less visible driver of this trend is sovereign accumulation. Central banks worldwide are expanding their physical gold reserves to reduce reliance on the US dollar and insulate their economies from external shocks. Goldman Sachs predicts this trend of official sector buying will continue well into 2026.

Anita Wright, a chartered financial planner at Ribble Wealth Management, explained the mechanics of this shift: "When confidence in financial assets and policy stability starts to wobble, gold tends to respond first as the primary monetary metal."

Meanwhile, the energy sector remains volatile but subdued compared to metals. Oil prices rose on Monday following a US blockade of Venezuelan tankers, with Brent crude climbing to $61.78. However, despite this geopolitical premium, crude oil is set to finish 2025 lower than where it began, highlighting the divergence between energy markets and the monetary metals booming in the current financial climate.