Drawing a parallel with a Formula 1 title fight decided at the final lap, bullion analyst Sanjiv Arole tracks how precious metals staged a dramatic finish to 2025.
The 2025 Formula 1 season went down to the wire with three drivers still in the running to win the title in season’s finale at Abu Dhabi. Ultimately, it was Lando Norris who thwarted Max Verstappen’s fifth successive title bid, as the defending champion made a spectacular run to clear a 100 points deficit from August 2025, by just two points.
Likewise, almost following the F1 jamboree, the precious metals appeared to be in a mad scramble to end 2025 at the very top of the pile. After the US Fed announced its 0.25% rate cut in September 2025, both gold and silver stormed to their respective then all-time high levels in early October 2025. Thereafter, gold consolidated itself and even faltered till the US Fed announced another 0.25% rate cut in December 2025. However, silver ran away as it scaled fresh all-time levels along the way, even platinum as well as palladium moved up stealthily.
Strangely, even after the US Fed cut interest rates in December, there was a sort of pause before the sprint began for year-end honours. Gold suddenly waltzed past the $4,400 per ounce barrier and zoomed past the $4,500 per ounce mark in a jiffy and attained an all-time high $4,550.80 per ounce on 26 December 2025, up by over 74% from the beginning of 2025. Not only that, gold clocked all-time high levels at least 50 times in the recent past.
Silver, which appeared subdued for most of year, suddenly sprang to life towards the end of the second quarter in June 2025. After crossing the much vaunted $50 per ounce (that held out since 1980) in October 2025, silver was a runaway train that just gathered speed and refused to halt. It appears to have knocked down all barriers along its way as it bull-dozed its way to yet another all-time high of $79.43 per ounce by the end of Boxing Day in New York. As a result, silver was up by around 170% from the start of 2025.
Silver was in the main aided by structural supply deficit for five consecutive years, strong industrial demand, inclusion of silver as a critical metal by the US government, the state of global economy, US Fed rate cuts, trade wars, geo-political tensions, gold’s record run that pulled silver along for most of the time, safe haven status after gold, weaker dollar, de-dollaristion and so on. In fact, silver saw the gold/silver ratio decline from around 126 in April 2025 to around a low of 57.
Platinum appears to have timed its pursuit for the top spot in 2025 as it overtook silver towards the second half of December 2025 and is currently up by over 170% from the start of the year. Earlier during the year, it moved up unobtrusively aided by its own supply deficit and other factors that impacted both gold and silver. It seems poised as it zoomed to a fresh all-time high of $2,477 per ounce on 26 December 2025 towards the end of day in New York. Palladium appeared to do nothing on its own as it gained momentum along with the rest of precious metals basket. So much so, that its price rose by over 116% during the year. So, while both silver and platinum, in a dead heat, sprint for a photo finish by the end of the year, is it time for all the precious metals to rejoice and celebrate in the precious metals basket? Is it all honky-dory?
The Investor Paradox: Buying High
It would all depend on if one can find buyers for the precious metals at these ridiculously high prices. True, most of the demand for jewellery, etc. has dried up. But nowhere are investors seen queuing up to sell their gold or silver due the extremely high prices. Instead, we see demand for investment gold, silver and platinum on the rise.
Central banks have bought gold in 2025, though not at the same levels as in the previous years. Demand for gold and silver ETFs continue at a rapid pace. Moreover, it also depends on who holds the metal as anyone holding physical metal either in bullion or jewellery form would see their value appreciate substantially and sit on notional profits and only benefit if customers buy at higher levels. For, these days resistance levels could become support levels as long as buyers have purchasing power as well as staying power to hold on to the metal even as prices rise and demand shrinks further.
So, retailers could face the music if price falls and they are forced to sell at lower price. However, since most of them settle metal against metal they tend to believe that everything squares off. But they do book losses as prices fall. Individuals tend to hold on to the metal for long time waiting for price reversal. Investors held on to silver purchased at the then high price of over Rs.70,000 plus per kg in 2011, in anticipation of silver crossing Rs.1,00,000 per kg soon. They were forced to hold on to the baby (silver) as the silver price crashed soon and remained subdued for over a decade thereafter. These players held on to the metal till Covid-19 pushed the silver price above those levels again. This time not only has silver crossed Rs.1,00,000 per kg but even as it nears Rs.2,50,000 per kg there has been no significant sell-off in silver. It would appear that investors expect the price to rise further and continue to hold on.
Could demand freeze as the silver price continues to rise unabatedly? Have speculators taken over the silver market? As silver is a relatively cheaper metal it is much more possible to hoard it. However, as gold is more expensive, the cost of holding on to it is quite steep and not feasible.
Earlier, the entire focus appeared to be on whether the US Fed would cut interest rates in December 2025 in view of an apparent division of opinion in the Fed board. Now with new economic data showing a rosy picture of GDP growth, will Fed cut rates more frequently or will there be a pause till Jerome Powell retires? For, Powell could be presiding over at least three Federal Open Market Committee (FOMC) meetings in 2026. Trump is expected to opt for rate cuts once his Fed chief pick takes over as Fed Chief in May 2026.
In 2026, geo-political tensions would continue as fresh conflict areas emerge across the globe. Apart from Ukraine, west Asia, etc., the new areas of engagement are Cambodia-Thailand border, US-Venezuela stand-off as well as US-Syria and US-Nigeria conflict. Then Pak-Afghanistan border skirmishes appear to be an on-going affair. To add to it are pre-election unrest and violence in Bangladesh and Myanmar. Then, the US multi-trillion debt, tariff wars, trade uncertainty et al could still push the US economy into recession. This could enhance gold’s safe haven status, but recession can put a spoke in the high flying industrial precious metals that run on twin engines when industrial demand combines with their safe haven status to give them a booster thrust to surge forward. At the moment, platinum appears well placed to enhance its position as an investment option as well as offer a cheaper but aesthetic jewellery (than silver) choice as opposed to the more expensive. It is also less prone to adulteration than gold.
Meanwhile, after an unbelievable 2025 it is very difficult to imagine an encore in 2026 for any of the precious metals. Logically, a correction is very much expected in 2026 as the bears hope for a bloodbath. However, many still anticipate a fast forward in silver well past $100 per ounce. The head is certain that history would not repeat itself while the heart clearly appears ready in most investors’ minds to throw caution to the winds and plough ahead with a bullish mindset. Some who expect a correction hope that it is not beyond 10-15% in silver.
Normally, when there is a surge in precious metals prices, silver leads the way followed by platinum, palladium and gold finally brings up the rear. On the other hand, whenever there is a sharp decline, silver’s fall is far steeper than the other metals in the basket. Most of the time, gold’s losses are minimal and it adjusts far better to the new price range and remains stable in otherwise choppy waters. This has been observed in the yellow metal’s prolonged bull-run after it crossed the $2,000 per ounce mark again during Covid-19 times.
However, if the precious metals surge further ahead and extend the bull-run, then it could signal the portents of a new world order in the global financial systems and trigger a drastic upheaval in economies all over the world. For, a new trend appears to have emerged in recent times as there has been no significant sell off in either gold, silver or any other precious metal even after prices have soared to astronomical heights. Investors continue to flock and store precious metals.
Is US debt (over $36 trillion plus) and its recent confrontationist trade policies with tariff wars et al finally going to sink the USD, send its economy into a tailspin? Is it the beginning of the end of fiat currency? Will it usher in a new financial payment system backed by a basket of precious metals? Is that the writing on the wall already?
The above may appear to be too alarmist or radical. But probably global leaders and economists and other stakeholders need to thrash it out threadbare. Change may be necessary and inevitable.
Finally, in early Monday morning trading (29 December 2025), all the precious metals except gold surged ahead. Silver rose to $83.93 per ounce, logging yet another all-time high and up by over 185% from the start of the year. Platinum too pushed ahead to $2,514 per ounce, up by over 176% from the beginning of the year. Palladium too made its move, but gold did not log a fresh all-time high. However, since early morning some profit booking has been seen just around 11 am in Mumbai. Gold declined by 0.35%, platinum by 0.69%, silver by 0.98% and palladium fell sharply by over 6%. So, volatility is the key in the last days of 2026 as silver and platinum fight out for the year end top spot.
A report emanating from the US and widely picked up in India claims that silver is now second in the list of assets by market capitalisation at $4.7 trillion just today morning briefly. In the process, it overtook companies like Alphabet, Apple and finally surged past tech giant Nvidia’s $4.6 trillion. This list is said to include public companies, precious metals, crypto-currencies and ETFs. The interesting part is that gold is at the top of pile with a market capitalisation at over $31 trillion. So, gold is still a long way off and out of reach of any asset class. Dilli ab bhi bahut door hai!