2025 has often been a bumpy ride for investors but we have now arrived at the final trading day of the year. And while the year may be winding down, there has still been plenty of price action in financial markets this week, particularly in the precious metals space.
Silver and gold both succumbed to bouts of profit-taking this week after experiencing parabolic gains. In the past week, both silver and gold chalked up new all-time highs (above $80 for silver, and above $4550 for gold), before falling steeply on Monday. The sharp pullback in precious metals from the record highs is classic year-end profit-taking after an extraordinary and eye-catching rally. Thin holiday liquidity amplified the swings, while easing geopolitical tensions, like progress on Ukraine peace talks, reduced some safe-haven demand. Both precious metals have since rebounded to some extent from their early-week lows, which may indicate that the recent price activity falls more into the ‘healthy breather’ category, rather than a trend reversal.
After hitting $80, silver slumped back down to $70 and has since recovered to the $75-$76 range. When weighing up the growing industrial demand for silver versus an expected supply shortfall next year, the maths still favours further price upside given the existing market dynamics.
Spot gold has clawed its way back to around the $4340 level (as of early Asian trading hours on Wednesday). However, a modest move higher in the USD combined with further year-end profit taking is dulling the current momentum for the yellow metal. Levels to watch include support at around $4287, which if broken, could see prices slide towards the next decent support at $4210. On the topside, resistance awaits at $4408, $4452, and $4535.
The Dollar has had a year to forget, having depreciated to the tune of nearly 10% courtesy of tariff woes and then a series of three Fed rate cuts. However the USD has found some minor comfort from the December FOMC meeting minutes, which showed that there remains a hawkish element to the Fed Board. The Dollar Index (DXY) pushed 0.2% higher overnight to 98.20, but with a new Fed Chairman due in May 2026 who is likely to be more dovish than the incumbent (Jerome Powell), upside gains look limited in scope unless US labour market data starts to mirror the surprise push higher in GDP (as seen GDP for Q3 2025).
It’s a shortened and interrupted trading week due to the New Year holidays, which leaves the economic calendar looking bare. However, thin liquidity owing to the holiday season leaves the possibility open that prices could still be jumping around on the last trading day of the year.
