Gold And Silver's Dramatic Year-End Ride

If you've been watching the markets, you might have noticed gold and silver have just wrapped up their most impressive annual performance since 1979, albeit with a few dramatic twists right at the finish line. These precious metals have delivered a truly blockbuster year for investors, showcasing their enduring appeal in uncertain times. Gold, the perennial safe haven, truly shone, surging by over 60% at one point. It even touched a staggering record high of more than $4,549 (around £3,378) an ounce before a slight dip post-Christmas, settling around $4,330 as the new year dawned. Silver wasn't far behind, hitting its own all-time high of $83.62 an ounce earlier in the week, and currently trades around $71. So, what's fuelling this glittering ascent? Experts point to a perfect storm of factors. A major driver is the anticipation of further interest rate cuts, particularly from the US Federal Reserve, expected in 2026. This often makes non-yielding assets like gold more attractive compared to bonds or savings accounts. Alongside this, central banks worldwide have been quietly stockpiling, adding hundreds of tons of gold to their reserves throughout the year. And in times of global uncertainty and economic jitters, investors traditionally flock to precious metals as a "safe haven," a trend clearly visible in the recent market movements. Silver, however, has an additional layer of demand: its crucial role in industry. Daniel Takieddine from Sky Links Capital Group highlights "supply tightness and industrial demand" as key drivers. This has been exacerbated by China, the world's second-largest silver producer, announcing restrictions on exports of silver and other key metals, citing environmental and resource protection. Even Tesla boss Elon Musk weighed in on social media, noting silver's importance in many industrial processes. It's not just physical bullion seeing interest; significant funds have poured into precious metal exchange-traded funds (ETFs). These allow investors an accessible way to trade precious metals on a stock exchange without having to take possession of the physical metal itself. Looking ahead, analysts remain optimistic. Rania Gule from trading platform XS.com anticipates gold will continue its climb in 2026, though at a "more stable pace" compared to the record highs seen this year. For silver, Mr. Takieddine also sees potential for further gains but cautions that "rallies may be followed by sharper corrections," suggesting a continued rollercoaster ride might be on the cards. --- Managing your business finances? TaxAce provides smart online accountancy services for UK businesses with flexible monthly plans. Image and reporting: https://www.bbc.co.uk | Read original article