Gold and silver continued their exceptional momentum into 2026, with both precious metals posting strong gains on Friday as trading resumed following the holiday period. The metals are building on their record-breaking 2025 performance, supported by sustained institutional demand and multiple fundamental drivers.

Latest Trading Performance

Spot gold rose 0.9% to $4,351.70 per ounce on Friday, while spot silver jumped 2% to $72.63 per ounce. The strong Friday performance demonstrates continued investor appetite for precious metals as portfolio diversifiers and inflation hedges.

Record-Breaking 2025 Performance

Both metals delivered exceptional returns, with gold marking its largest annual gain in 46 years at 64%, while silver recorded its highest-ever yearly increase of 147%. Platinum achieved its largest annual gain ever at 127%, and palladium posted its best performance in 15 years with a 76% increase.

Analyst Perspectives and Market Drivers

Analysts attribute the sustained rally to multiple fundamental factors. Vishnu Varathan, head of macro research for Asia ex-Japan at Mizuho, said the metals rally highlights demand for "hedges against entrenching USD debasement risks."

Inderbir Singh Jolly, CEO of PL Wealth, emphasized the structural nature of the current rally. "The rally is not driven by short-term speculation but by sustained investment flows and continued central bank purchases," he noted, adding that elevated geopolitical risks, stretched equity valuations, and currency volatility have reinforced gold's role as a strategic hedge.

Rajeev Sharan, head of research at Brickwork Ratings, highlighted silver's historic surge, noting that the 140% increase mirrored gold's strong performance and pointed to broader shifts in portfolio positioning by investors and nations.

Market Outlook and Potential Challenges

Looking ahead, analysts expect gold and silver to remain supported by underlying factors including sustained central bank buying, robust ETF inflows, geopolitical uncertainty, and concerns over currency and inflation trends. Gold is likely to hover in the $4,500-5,000 per ounce range, with silver continuing to benefit from sustained investor interest.

However, some near-term challenges remain. Daniel Ghali, a senior commodity strategist at TD Securities, noted potential selling pressure from portfolio rebalancing, writing: "We expect a massive 13% of aggregate open interest in Comex silver markets will be sold over the coming two weeks, to result in a dramatic repricing lower."

Despite potential short-term consolidations, the fundamental drivers supporting precious metals remain intact, with analysts expecting continued strength based on structural shifts in investor behavior and ongoing macroeconomic uncertainties.

Silver prices soared back above $80 on Wednesday, extending gains for the fourth consecutive day as the precious metal builds momentum toward its record high. The white metal gained 1.8% and has risen over 13% across the previous three sessions, demonstrating continued strength amid robust retail investor appetite and persistent supply constraints.

Four-Day Rally Builds Momentum

Silver increased 1.6% to hit $82.61 per ounce, marking the fourth consecutive day of gains. The metal is now building momentum toward its record high of $84.01 an ounce, which it achieved on December 29. This sustained rally represents a significant recovery from previous volatile trading sessions.

Strong Annual Performance and Market Drivers

Silver witnessed its strongest annual gain, rising 147% on increasing industrial and investor appetite. Retail investor appetite, especially in China, has been a key driver of silver's growth. The metal's spectacular rally has outpaced other precious metals, benefiting from both supply shortages and potential US import tariffs that are keeping significant supplies locked up in New York.

Gold Also Extends Gains

Meanwhile, gold extended Tuesday's gains with spot gold increasing 0.8% to hit $4,485.39 per ounce, after a 3% gain in the previous session. Gold edged 0.1% lower at $4,490.51 an ounce as of 8.41 am in Singapore, bringing rates closer to the record high of $4,549.71, which it hit on December 24. The bullion has risen over 4% in the last three sessions.

Market Outlook and Economic Factors

Traders are looking beyond geopolitical tensions to US economic data due this week, including the December jobs report due Friday. Fed Governor Stephen Miran indicated the US central bank would need to cut interest rates by more than a percentage point, arguing that monetary policy is restraining the economy. Three successive rate cuts last year provided tailwinds for precious metals, which don't pay interest.

Gold posted its best annual performance since 1979, hitting a series of record highs with support from central-bank buying and inflows to bullion-backed exchange-traded funds. Palladium and platinum also witnessed small gains in the current trading environment.