Precious metals experience a sharp rise, face setbacks, and then recover – Commerzbank
Precious Metals Surge and Retreat Amid Year-End Market Swings
In the closing days of the year, precious metals saw dramatic price surges, with some experiencing swift corrections shortly after. According to Carsten Fritsch, a commodities analyst at Commerzbank, gold soared to an unprecedented $4,550 per troy ounce on Boxing Day.
Holiday Volatility Drives Gold and Silver to New Heights
During the festive period, silver prices climbed even more steeply, hitting a record $84 per troy ounce in the early hours of December 29. Platinum also reached a peak of $2,490 per troy ounce, while palladium touched a three-year high, just below $2,000 per troy ounce. These impressive gains were likely amplified by reduced market liquidity over the holidays. For silver, additional upward pressure came from worries about limited physical supply, dwindling inventories in China, declining COMEX stocks, and new Chinese export restrictions set to take effect in early 2026.
Despite these highs, prices retreated by year’s end. Silver, in particular, dropped by over $10 on December 29, marking its steepest single-day percentage loss in more than five years. The heightened volatility prompted CME, which operates COMEX, to further increase margin requirements for silver futures, resulting in margin calls and likely triggering forced liquidations by investors. The Shanghai Futures Exchange had already raised its margin requirements earlier. Nevertheless, all major precious metals posted remarkable annual gains: gold advanced 64.6% year-over-year, silver surged by 148%—both the largest yearly jumps since 1979. Platinum gained 127%, the most since it began trading in 1987, and palladium rose 77.5%, its strongest performance in 15 years.
New Year Brings Renewed Momentum for Precious Metals
As the new year begins, precious metal prices are once again on the rise, nearing the peaks seen at the end of 2025. Yesterday, gold increased by nearly 3% to $4,450 per troy ounce, while silver advanced over 5% to $76.6 per troy ounce. Both metals continue to climb today. The recent US military action in Venezuela has heightened demand for safe-haven assets. Additionally, the ISM manufacturing index in the US fell to its lowest point in 14 months in December, putting downward pressure on the US dollar and fueling expectations of Federal Reserve interest rate cuts. This environment is providing further support for non-yielding assets like gold and silver.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
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