Silver blasted through the $75-per-ounce threshold for the first time on Friday, December 26, as an end-of-year squeeze in liquidity collided with a powerful mix of rate-cut expectations, a softer dollar, and surging demand for precious metals as both hedges and industrial inputs. Gold held above $4,500 after notching fresh all-time highs, while platinum and palladium erupted higher—moves that traders described as amplified by thin holiday markets and the smaller size of those metals’ trading pools. [1]
The surge in metals unfolded alongside a broader year-end push in global risk assets. Asian stocks rose toward multi-week highs, U.S. stock-index futures were steady, and the “Santa Claus Rally” narrative returned—yet safe-haven metals were rallying at the same time, underscoring how investors are trying to close out 2025 positioned for both growth resilience and geopolitical uncertainty. [2]
What happened today: record highs across silver, gold, and platinum
By mid-morning in Europe, spot silver had printed a record high of about $75.14 an ounce and was still trading near that milestone, marking one of the most dramatic breakouts in modern metals trading. The move capped a year in which silver’s gains have far outpaced gold’s—roughly 158% year-to-date for silver versus about 72% for gold, according to Reuters. [3]
Gold, meanwhile, continued to trade in record territory, touching roughly $4,530.60 an ounce at its peak in early Asian hours before easing slightly—still firmly above $4,500 and on pace for its strongest annual performance since 1979. [4]
The most volatile fireworks were arguably in the “smaller” precious metals:
- Platinum jumped sharply and hit a record around $2,448.25 in intraday trading, with Reuters also reporting an all-time high near $2,413.62 earlier in the session depending on timing and venue—an illustration of how fast prices were moving in thin conditions. [5]
- Palladium rallied hard as well, rising into the $1,800s per ounce in the day’s surge. [6]
One key dynamic: this wasn’t simply “fear trade” buying. Traders pointed to a cocktail of macro, positioning, and supply/demand forces that turned a strong year into an explosive year-end sprint.
Why precious metals are surging: rate cuts, dollar weakness, and a year-end liquidity effect
Multiple catalysts lined up in late December—and each one matters more when fewer market participants are active.
1) Rate-cut expectations keep supporting non-yielding assets
Gold and silver do not pay interest, so they tend to benefit when investors expect borrowing costs to fall. Reuters reported that markets are pricing in two U.S. rate cuts in 2026 in expectations of a more dovish Federal Reserve, keeping non-yielding assets “well-supported.” [7]
In this environment, even modest shifts in the expected path of rates can move precious metals disproportionately—especially when year-end volumes are low.
2) “Low liquidity is amplifying the volatility”
Thin holiday trading repeatedly came up as a key accelerant. Reuters quoted UBS analyst Giovanni Staunovo noting: “Low liquidity is amplifying the volatility across all precious metals.” [8]
That thinness is not just a footnote—it’s a mechanical driver. When fewer bids and offers sit in the market, any surge in orders can push prices further and faster than normal.
3) Central bank buying, ETF inflows, and “de-dollarisation” themes
Gold’s 2025 run has been underpinned by recurring demand from official institutions and investors looking for diversification away from currencies. Reuters cited a mix of central bank buying, ETF inflows, and de-dollarisation trends as major supports behind gold’s best year since 1979. [9]
Reuters also highlighted investor concerns about currency debasement and rising global debt as part of the narrative supporting the rally. [10]
4) Silver’s unique “double identity”: safe haven plus industrial metal
Silver often trades like “gold with a turbocharger,” and 2025 delivered exactly that. Reuters attributed silver’s year-to-date surge to persistent supply deficits, its status as a U.S. critical mineral, and robust industrial demand. [11]
Earlier this month, Reuters described a “perfect storm” behind silver’s rally, including demand expectations tied to AI data centers, solar cells, and electric vehicles—sectors that use silver in high-performance electrical applications. [12]
That industrial foundation helps explain why silver can keep running even when gold pauses: a portion of demand is linked to manufacturing and electrification, not only investor risk sentiment.
Platinum’s breakout has a policy catalyst: Europe’s combustion-engine rethink
Platinum’s rally has had its own distinct driver: expectations that demand tied to the auto sector could remain stronger for longer.
Reuters reported that platinum’s record surge was fueled by tight supply, an EU policy U-turn related to the 2035 combustion-engine ban, and investor flows rotating out of gold. [13]
A Reuters factbox earlier in December laid out what the European Commission proposed: revisions that would relax the effective 2035 ban by moving to a 90% tailpipe-emissions reduction goal (instead of 100%), while allowing plug-in hybrids and other flexibilities beyond 2035. [14]
Why that matters for platinum: catalytic converters used in internal combustion engines (and many hybrid configurations) rely heavily on platinum-group metals. If markets believe internal combustion technology will persist longer than previously assumed, expected demand doesn’t drop off as quickly—and prices can re-rate sharply, particularly when supply is tight.
Stocks are rising too: a year-end rally meets a metals melt-up
One of the most striking aspects of December 26 is that this is not a simple “risk-off day.” Global markets showed a split-screen dynamic.
Asia: gains in thin trade, record levels in Japan and strong 2025 performance in Korea
Reuters reported Asian stocks climbed to a six-week high even with multiple regional markets closed for holidays. Japan’s Topix hit a record, South Korea’s benchmark index rose again—bringing its 2025 gain to about 72%, making it a standout performer among major markets—while China’s blue-chip index tracked toward its best annual rise since 2020. [15]
AP also reported mixed Asian performance but highlighted Japan’s equity strength, noting the Nikkei rose after the Cabinet approved a record defense budget exceeding 9 trillion yen ($58 billion), amid heightened regional tensions. [16]
US and global equities: “Santa Claus Rally” framing returns
A Bloomberg Markets Wrap republished by SWI swissinfo.ch described stocks extending a year-end rally in thin trading, with the MSCI All Country World Index set for a seventh day of gains, and U.S. stock-index futures little changed after the S&P 500 finished the prior session at a record. [17]
The same report noted investors looking to the traditional “Santa Claus Rally” window—the last five trading days of the year and the first two of the new year—even as debates continue about valuations and the next leg of the AI-driven growth cycle. [18]
The dollar, bonds, and cross-asset signals investors are watching
Moves in currencies and bonds added another tailwind for metals.
Reuters reported the U.S. dollar has been under pressure, with the dollar index on track for its weakest weekly performance since July, as markets weigh how quickly the Fed will cut again and watch for political signals that could influence the future policy path—including an expected nomination for the next Fed chair in 2026. [19]
On rates, the Bloomberg wrap via SWI swissinfo.ch reported U.S. Treasuries slipping slightly, with the 10-year yield rising to about 4.15% in Asian hours. Even with yields not collapsing, the broader narrative of easier policy ahead—and the dollar’s softness—remained supportive for metals pricing. [20]
Gold futures are soaring too—here’s how investors are getting exposure
Gold’s record run is showing up not only in spot prices but also in futures markets, which are often where macro investors express their highest-conviction directional views.
Reuters reported U.S. gold futures for February delivery trading around the mid-$4,500s on December 26, alongside spot prices above $4,500. [21]
And for investors trying to understand how capital moves into gold at scale, Reuters recently outlined the main channels:
- Spot market: dominated by large banks and institutional buyers, with London as a key hub via the London Bullion Market Association framework. [22]
- Futures market: with COMEX (part of the New York Mercantile Exchange) described as the largest gold futures market by volume, alongside major Asian venues such as the Shanghai Futures Exchange and Japan’s TOCOM. [23]
In practice, a surge in futures can reinforce spot momentum—especially when liquidity is thin and momentum strategies begin to chase breakouts.
What happens next: the catalysts heading into early 2026
With gold and silver already logging their strongest year since 1979, the next question is whether the market is pricing a sustainable new regime—or a late-cycle blow-off in a thin market.
Key items investors are likely to focus on over the next two weeks:
- Fed messaging and U.S. data: any hint that cuts come sooner—or are fewer than priced—can jolt metals and the dollar. [24]
- Dollar direction: continued weakness can keep commodity prices elevated, but a sharp rebound can tighten financial conditions quickly. [25]
- Physical-market signals: Reuters noted widening gold discounts in India and changes in China’s discounting patterns—useful clues on whether high prices are suppressing jewelry and retail demand. [26]
- Policy headlines (Europe autos): further clarity on Europe’s post-2035 rules could keep platinum and palladium volatile. [27]
- Geopolitical risk: markets continue to cite geopolitical tensions as a support for safe-haven demand, and headlines can move prices faster when year-end liquidity remains thin. [28]
For now, December 26 stands out as a defining “capstone” session: precious metals finishing a historic year not quietly, but with a final burst that pushed benchmarks into uncharted territory—while global stocks tried to rally into year-end at the same time. [29]
References
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