Emre Yumlu 
The year 2025 will likely be remembered as a defining period for precious metals. Amid escalating geopolitical tensions, shifting monetary policy expectations, and a weaker US dollar, both gold and silver delivered exceptional performances. As prices reached record or near-record levels, investor attention has now turned to whether this momentum can extend into 2026.
What Drove Gold and Silver Higher in 2025?
The rally accelerated sharply in the final quarter of the year. Silver emerged as the standout performer, gaining 171.5% year-to-date on an ounce basis and climbing to $83, making it the best-performing year gold and silver of 2025. Gold followed closely, with prices rising approximately 72% over the past twelve months.
At the core of this surge were heightened global uncertainties. Trade tariffs implemented by the US, ongoing conflicts in the Middle East, and the prolonged war in Ukraine pressured risk assets such as equities and cryptocurrencies, while reinforcing gold’s role as a defensive store of value.
Monetary policy expectations provided a second major tailwind. Throughout 2025, markets increasingly priced in the prospect of interest rate cuts from the US Federal Reserve. The anticipation of a more accommodative policy environment reduced the opportunity cost of holding non-yielding assets like gold.
A third supportive factor was the decline in the US dollar. With the dollar index down roughly 10% over the year, gold became more attractive to international investors, further strengthening demand.
Central Banks and ETFs Remain Key Pillars of Demand
Central bank buying continues to play a critical role. Analysts note that official sector demand has remained elevated for four consecutive years, a trend expected to persist into 2026. According to Metals Focus, central banks are projected to purchase around 850 tons of gold in 2025—below 2024 levels, but still historically strong.
Investment demand has also been robust. Data from the World Gold Council shows that physically backed gold ETFs have attracted approximately $82 billion in inflows this year, equivalent to around 749 tons of gold. This marks the strongest ETF demand since 2020.
World Gold Council: A Shift From Momentum to Balance
Looking ahead, the World Gold Council highlights an important distinction. While many of the forces that fueled gold’s rise remain intact, prices have already incorporated much of the prevailing macroeconomic consensus. With real interest rates no longer falling sharply and momentum moderating, further gains may be more measured.
Major Banks’ 2026 Price Expectations
Large financial institutions broadly agree that elevated prices could persist. UBS expects gold to test $5,000 per ounce during the first three quarters of 2026 before consolidating near $4,800 later in the year. Goldman Sachs maintains a $4,900 target for December 2026, while Deutsche Bank projects an average price of $4,450, with fluctuations between $3,950 and $4,950.
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