Wedoany.com Report-Dec.24, Precious metals continued their strong upward momentum in late December, with gold approaching $4,500 per ounce and silver reaching new peaks near $70 per ounce on Tuesday, driven by expectations of continued U.S. monetary policy easing and ongoing global uncertainties.

Spot gold reached a high of $4,497.55 per ounce, while silver climbed to a record level of $69.98 per ounce, building on substantial yearly advances.

"With precious metals making record prices so late in the year, when ordinarily one might have found time to write a Christmas card or two, perhaps the biggest takeaway is that investors have not treated the festive break as an occasion to take profits," Mitsubishi analysts said.

Gold has achieved multiple record levels throughout 2025, supported by lower U.S. interest rates and a softer dollar. Market participants anticipate further potential increases into the coming year, with Goldman Sachs projecting gold at $4,900 per ounce by December 2026.

The U.S. dollar has declined nearly 10% in 2025, positioning it for one of its weakest annual performances in recent years. Many observers expect this trend to persist into 2026 amid improving global growth prospects and additional Federal Reserve policy adjustments.

"Rate cut bets have ramped up following the recent inflation and labour data prints in the U.S., which is helping drive precious metal demand," said Zain Vawda, analyst at MarketPulse by OANDA.

Safe-haven interest has remained firm due to developments in the Middle East, questions surrounding a potential Russia-Ukraine resolution, and recent U.S. measures related to Venezuelan tankers.

Central bank demand for gold has stayed robust over the past four years and is expected to carry forward into 2026, complemented by solid investment interest.

Central banks are projected to acquire around 850 tons of gold in 2025, a decrease from 1,089 tons in 2024, according to Philip Newman, managing director at consultancy Metals Focus. "It's still a very healthy figure in absolute terms," he added.

Physically backed gold exchange-traded funds are experiencing their largest inflows since 2020, drawing $82 billion, or the equivalent of 749 tons, so far this year, per the World Gold Council.

Jewellery demand has faced challenges from elevated prices, though this has been partially balanced by increased retail purchases of bars and coins. In India, jewellery consumption dropped 26% year-on-year to 291 tons during January-September, with the final quarter also appearing subdued, according to Metals Focus, which noted the softness is likely to extend into 2026.

Retail investment in bars and coins in India increased 13% to 198 tons over the same period, fueled by the record-high prices and positive market sentiment, Metals Focus reported.

Silver has outperformed gold, surging more than 140% this year compared to gold's over 70% rise, bolstered by strong investment flows, its designation on the U.S. critical minerals list, and momentum-driven purchases.

Silver exchange-traded product inflows have exceeded 4,000 tons, said Standard Chartered analyst Suki Cooper.

"Momentum and fundamentals support further gains, though stretched positioning and low year-end liquidity may cause volatility, with traders buying dips while real yields remain low and physical supply tight," Mitsubishi analysts said.

Silver currently appears technically overbought, with the gold-silver ratio now at 64 ounces of silver to one ounce of gold, down from 105 ounces in April.

"There will definitely be people trading the gold-silver ratio, but otherwise, when this febrile atmosphere evaporates, they will decouple and silver will almost certainly be the underperformer," StoneX analyst Rhona O'Connell said.

These trends highlight sustained investor and institutional interest in precious metals amid the prevailing economic and international environment.