Buckle up, because precious metals are off to a roaring start in the New Year, building on an already phenomenal 2025!
On Friday, the market saw a continuation of the upward trend, driven by a combination of global uncertainties and anticipation of lower interest rates. This is great news for investors who see these metals as a safe haven.
Spot gold saw a significant jump of 1.3%, reaching $4,372.02 per ounce as of 0357 GMT. This follows a record high of $4,549.71 on December 26th. U.S. gold futures for February delivery also rose, gaining 1% to $4,386.40/oz.
Tim Waterer, chief market analyst at KCM Trade, noted that the gains are a rebound from year-end selling, and that "gold is kicking off 2026 with gains, now that fundamentals are again in focus."
But here's where it gets controversial... 2025 was a landmark year for bullion, with an impressive annual gain of 64% – its best performance since 1979! Several factors fueled this rally: expectations of interest rate cuts, geopolitical conflicts, strong demand from central banks, and increased holdings in exchange-traded funds. The market is anticipating at least two rate cuts by the Federal Reserve this year.
In the U.S., the number of new jobless claims last week was the lowest in a month, but the labor market remains weak. Waterer believes these claims will have little impact on the expectations of rate cuts.
"Precious metals are commencing 2026 in much the same fashion as they performed in 2025 - which is to say with forward momentum."
And this is the part most people miss... Non-yielding assets, like gold, tend to thrive in low-interest-rate environments. This is because lower rates reduce the opportunity cost of holding non-yielding assets, making them more attractive to investors.
Silver also had a stellar performance, increasing by 2.8% to $73.30 per ounce after reaching an all-time high of $83.62 on Monday. Silver's year-end surge was an astounding 147%, its best year ever, driven by its designation as a critical U.S. mineral, supply constraints, and rising demand.
Platinum rose 3.1% to $2,116.40 per ounce, after hitting an all-time high of $2,478.50 on Monday, with an annual climb of 127%. Palladium increased by 2.2% to $1,641.03 per ounce, closing the previous year up 76%, its best in 15 years.
What do you think? Are these gains sustainable? Will geopolitical tensions continue to drive demand for precious metals? Share your thoughts in the comments below!
