Gold, Silver Stumble at the End of Best Year Since the 1970s

Gold and silver fell on the last trading day of 2025, though both remained on track for the biggest annual gain in more than four decades as a banner year for precious metals drew to a close.

Spot gold hovered around $4,320 an ounce, while silver slid toward $71. The two have seen exceptional volatility in thin post-holiday trading, plunging Monday before recovering Tuesday and dropping again Wednesday. The big swings prompted exchange operator CME Group to raise margin requirements twice.

Both metals are on track for their best year since 1979, supported by strong demand for haven assets amid mounting geopolitical risks and by interest-rate cuts by the US Federal Reserve. The so-called debasement trade — triggered by fears of inflation and swelling debt burdens in developed economies — has helped supercharge the scorching rally.

In gold, the bigger market by far, those factors spurred a rush by investors into bullion-backed exchange-traded funds, while central banks extended a years-long buying spree.

Gold is up about 63% this year. In September, it eclipsed an inflation-adjusted peak set 45 years ago — a time when US currency pressures, spiking inflation and an unfolding recession pushed prices to $850. This time around, the record run saw prices smash through $4,000 in early October.

“In my career, it’s unprecedented,” said John Reade, a market veteran and chief strategist at the World Gold Council. “Unprecedented by the number of new all-time highs, and unprecedented in the performance of gold exceeding the expectations of so many people by so much.”

Silver has notched up a gain of more than 140% during the year, driven by speculative buying but also by industrial demand. The metal is used extensively in electronics, solar panels and electric cars. In October, it soared to a record as tariff concerns drove imports into the US, tightening the London market and triggering a historic squeeze.

The new peak was then passed the following month as US rate cuts and speculative fervor drove prices higher. The rally topped out above $80 earlier this week — in part reflecting elevated buying in China.

Yet the latest move swiftly reversed, with the market closing down 9%  Monday then swinging the following two days. In response to the extreme volatility, CME Group again raised margins on precious-metal futures, meaning traders must put up more cash to keep their positions open. Some speculators may be forced to shrink or exit their trades — weighing on prices.

By Yihui Xie and Jack Ryan

Source: Yahoo

Morgan Stanley Says Gold Pullback Is a Buying Opportunity, Lifts Focus to 2026

The gold price ended the week at 4,219.53 dollars per ounce, up 1.35 percent, extending a strong run that has kept the metal well bid through late November. 

Prices have held firm after a series of volatile sessions, with last week’s moves ranging between 4,074 and 4,218 dollars, as investors continued to rotate back into precious metals.

Morgan Stanley calls gold its top pick across the commodities complex and expects the backdrop to stay supportive into 2026.

The bank points to a decisive shift in investor behaviour this year, with ETFs reversing four years of net selling and adding the largest tonnage since 2020.

It expects that demand to continue as interest rates fall, while central banks keep adding to reserves and jewellery consumption shows early signs of stabilising.

The bank says demand for real assets has also strengthened as investors reassess portfolio hedges against inflation risks and economic uncertainty.

With that backdrop in mind, Morgan Stanley views the latest dip in prices as an entry point and holds a mid-2026 forecast of 4,500 dollars per ounce.

Risks include further bouts of volatility that could divert flows to other asset classes, or any shift by central banks toward reducing reserves.

Silver is also on Morgan Stanley’s radar, with the market likely to remain in deficit and prices expected to stay close to record territory.

By Dave Taylor

Source: Exchange Rates UK