Gold (GC=F) and silver (SI=F) are among this year’s biggest gainers, with the momentum taking prices to record levels and setting their best year since 1979.
Gold traded above $4,500 a troy ounce on Wednesday before paring gains as it marked another milestone in a year packed with more than 50 all-time highs.
Silver has had an even stronger year, soaring 150% thanks to strong industrial demand and physical shortages. The metal surpassed $70 on Wednesday, while futures rose to more than $72 an ounce.
Meanwhile, copper (HG=F) also participated in the metals rally, hitting all-time highs on supply concerns before paring its gains.
The rally in the metals space came as investors’ focus on 2025 has spread to almost all risk assets, from cryptocurrencies and AI trading to European stocks.
But gold and silver increasingly stand out as the trades of the year.
“In the new paradigm, gold is seen as a currency rather than a commodity,” Shree Kargutkar, senior portfolio manager at Sprott Asset Management, told Yahoo Finance.
Strategists point to a restructuring in the traditional portfolio of 60% stocks and 40% bonds.
Read more: Are you thinking of buying gold? Here’s what investors need to keep in mind.
“Investors are getting smarter and smarter,” Blue Line Futures chief market strategist Phil Streible told Yahoo Finance. “They are realizing that they need to add strategic commodities like gold, silver and copper to their portfolios to diversify.”
In the case of gold, central bank hoarding, purchases of exchange-traded funds (ETFs), a weaker dollar and falling interest rates have been important tailwinds. Few of them are expected to decline in the coming year.
President Trump is expected to soon announce his pick to replace Federal Reserve Chair Jerome Powell, whose term ends in May, raising expectations that a dovish Fed and “hot” policy could further boost prices.
Read more: How to invest in gold in 4 steps
Some Wall Street analysts also see more room to run as central banks remain “resistant” net buyers of gold. Goldman Sachs reaffirmed its “structurally bullish” outlook with a price target of $4,900 by the end of 2026, with upside risk if underallocated private investors add to their portfolios.
The World Gold Council suggests that higher fiscal spending, demand from central banks and lower rates could drive prices 5% to 15% higher next year.
“If economic growth slows and interest rates continue to fall, gold could post modest gains,” Joe Cavatoni, senior market strategist at the World Gold Council, told Yahoo Finance on Monday. “In a more severe recession marked by rising global risks, gold could perform well.”