Daijiworld Media Network - New York
New York, Dec 31: Gold and silver prices are on course to post their strongest annual gains since 1979, driven by global economic uncertainty, volatile trade policies and sustained buying by central banks and investors.
Gold prices have surged nearly 70% in 2025, while silver has jumped more than 160% this year, including a sharp rise of over 30% in December alone. The rally gathered momentum in late April following US President Donald Trump’s turbulent global tariff announcements, which unsettled markets and sparked concerns over the long-term strength of the US dollar.
Precious metals, often seen as safe-haven assets, tend to gain when investors move away from riskier assets such as equities. In contrast, the US dollar has fallen more than 9% this year against a basket of major currencies, including the euro and yen.
Analysts at RBC Capital Markets said gold benefited from its appeal as a non-sovereign asset. “The broader economic environment continues to provide multiple factors that historically have influenced gold price movements,” they noted in a December report.
Central banks across the world have remained consistent buyers of gold, according to the World Gold Council. In October alone, central banks added 53 tonnes of gold to their reserves, further tightening supply and supporting higher prices.
Following Trump’s so-called “liberation day” in early April, traders and major banks shifted large quantities of precious metals to the US to get ahead of newly imposed tariffs. While London remains the world’s main clearing hub for gold, New York has expanded its vault capacity in recent years, with much of the metal likely still held there.
Silver has also been buoyed by strong industrial demand, particularly in electric vehicles, electrical circuits and solar energy products. However, its lower price — around $77 per ounce compared to gold’s $4,300 — has made it more vulnerable to sharp swings and retail trading activity.
Silver prices briefly dipped after Tesla CEO Elon Musk remarked on social media that rising silver prices were “not good” due to its importance in industrial processes. Despite a drop of over 8% on Monday, silver rebounded strongly and was up 10% by midday Tuesday.
Gold also saw some volatility, falling more than 4% on Monday before recovering slightly. Analysts attributed the dip to profit-taking and optimism over possible progress towards peace in Ukraine, following talks between President Trump and Ukrainian President Volodymyr Zelenskyy.
Investor interest remains strong, with the largest gold ETF, GLD, recording over $20 billion in inflows this year. The popular silver ETF, SLV, has attracted nearly $3.5 billion. Overall, gold ETFs have seen five consecutive months of inflows through November, the World Gold Council said.