Precious metals staged a strong recovery on Tuesday, December 30, bouncing back from a sharp sell-off in the previous session. The market's renewed focus on simmering geopolitical tensions and economic uncertainties reignited gold's powerful rally, helping the yellow metal secure its most impressive annual performance in over four decades.
Metals Rebound After Volatile Session
Spot gold climbed 0.8% to $4,364.70 per ounce by 2:07 p.m. ET (1907 GMT). This upswing followed a turbulent Monday, where the metal recorded its most significant single-day percentage loss since October 21. That drop was triggered by profit-taking after gold hit a record peak of $4,549.71 on Friday. In the futures market, U.S. gold futures settled 1% higher at $4,386.30.
"We witnessed extreme volatility yesterday with strong buying in Asian trading followed by substantial profit-taking," commented Peter Grant, Vice President and Senior Metals Strategist at Zaner Metals. "However, conditions have stabilised today, and the overall trade sentiment remains favourable."
The Perfect Storm for a Historic Rally
Viewed globally as the ultimate safe-haven asset, gold has experienced a meteoric rise in 2025. For the year, gold has surged by an astounding 66%, marking its steepest annual climb since 1979. This historic rally has been fuelled by a confluence of powerful factors.
The driving forces include a global shift towards interest rate easing, persistent geopolitical flashpoints, robust and sustained purchases by central banks worldwide, and significant capital flowing into gold-backed exchange-traded funds (ETFs).
Adding to the economic uncertainty, minutes from the U.S. Federal Reserve's latest two-day meeting in December revealed a "deeply nuanced debate" about risks to the American economy before officials agreed to cut interest rates. The Fed's next policy meeting is scheduled for January 27-28, with investors widely anticipating that rates will be held steady.
Geopolitical Tensions and Other Metals Shine
Geopolitical concerns continue to provide a solid floor for prices. "The market remains sceptical about the Russia-Ukraine peace deal, and broader measures of geopolitical risk are still elevated," Grant noted, highlighting a key supportive factor. Tensions flared after Russia accused Ukraine of attempting to attack President Vladimir Putin's residence, vowing retaliation—a claim Ukraine dismissed as baseless.
The rally was not confined to gold. Silver skyrocketed 7.3% to $77.48 per ounce. After hitting an all-time high of $83.62 on Monday, it experienced its biggest daily drop since August 2020. For 2025, silver has delivered a staggering 168% gain, propelled by its inclusion on the U.S. critical minerals list, persistent supply deficits, and booming demand from both industrial users and investors.
Platinum and palladium also joined the rebound. Platinum rose 5.1% to $2,216.45 per ounce, following a record high of $2,478.50 on Monday and its largest-ever one-day decline. Palladium increased 1.6% to $1,639.08, recovering from a steep approximately 16% fall on Monday.
As the year closes, the precious metals complex has demonstrated remarkable strength, with investors continuing to seek shelter in these tangible assets amid a landscape filled with economic and political uncertainties.
