Precious Metals Kick Off 2026 with Strong Gains

SadaNews Economy - Precious metals started the new year with a strong rise on Friday, continuing the extraordinary upward wave witnessed throughout 2025, amid ongoing geopolitical tensions and increasing hopes for interest rate cuts this year, which boosted demand for safe-haven assets.

Gold recorded its second-largest annual gains ever in 2025, while silver achieved its highest annual increase in history. Platinum surged over 127 percent last year, marking its largest annual gain ever, while palladium had its best annual performance in 15 years, according to Reuters.

By 05:53 GMT, the spot gold price rose by 1.5 percent to reach $4,378.75 an ounce, after hitting a record level of $4,549.71 on December 26, before retreating to its lowest level in two weeks on Wednesday. Additionally, U.S. gold futures for February delivery increased by 1.2 percent to $4,392.20 an ounce.

Tim Waterer, chief market analyst at KCM Trade, said: "Precious metals have begun to recover from the wave of selling they experienced at the end of last year, which pressured prices earlier this week." He added that the reduction in liquidation pressure at the beginning of the new year has brought fundamentals back to the forefront, allowing gold to start 2026 with positive momentum.

Precious metals recorded a notable increase in 2025, ending the year with annual gains of 64 percent, the largest since the oil crisis in 1979. This rise was supported by interest rate cuts, expectations of further monetary easing by the U.S. Federal Reserve, alongside geopolitical disputes, strong demand from central banks, and rising holdings in exchange-traded funds.

In the United States, the number of new unemployment claims last week reached its lowest level in a month, and although the figures have retreated from their recent record highs, indicators of labor market weakness still persist during the second term of President Donald Trump. Waterer noted that this data did not create a significant impact on market expectations regarding multiple interest rate cuts this year.

He added, "Precious metals start 2026 with the same strong performance they delivered in 2025, i.e., with clear positive momentum."

Investors currently expect the Federal Reserve to cut interest rates at least twice this year, in an environment where non-yielding assets, like gold, tend to perform better.

In this context, the spot silver price rose by 3.7 percent to reach $73.90 an ounce, after hitting a record level of $83.62 on Monday. Silver ended 2025 with gains of 147 percent, significantly outperforming gold in its best annual performance ever. This rise was driven by its classification as a vital American metal, alongside limited supply and declining inventories amid rising industrial and investment demand.

The spot platinum price also rose by 2.5 percent to $2,105.48 an ounce, after reaching its all-time high at $2,478.50 on Monday, realizing its largest annual gain in history with a rise of 127 percent.

Palladium prices increased by 2.1 percent to $1,639.12 an ounce, after finishing last year with gains of 76 percent, marking its best annual performance in 15 years.