The precious metals market witnessed a historic surge on Monday, with silver prices breaking through the critical $80-per-ounce barrier to set a new all-time high. The white metal's spectacular rally was fueled by a potent mix of tight physical supplies, robust industrial demand, and growing anticipation of further interest rate reductions in the United States.
Record-Breaking Rally and Profit-Taking
According to Reuters data, spot silver jumped 3.8% to reach $82.15 an ounce. During the trading session, it soared to an unprecedented peak of $83.62 per ounce. This remarkable move means silver has skyrocketed by an astonishing 181% since the beginning of the year, dramatically outperforming its traditional rival, gold. However, the metal later experienced a pullback, slipping 1.3% to $78.12 per ounce as investors decided to cash in on the massive profits.
Market analysts pointed to a combination of factors for this retreat. "A combination of profit-taking and seemingly productive talks between Trump and Zelenskyy regarding a potential peace deal have put gold, silver on the back foot," explained Tim Waterer, chief market analyst at KCM Trade, in comments to Reuters. The mention of progress toward ending the Ukraine conflict temporarily dampened the safe-haven appeal of precious metals.
Key Drivers Behind the Meteoric Rise
The foundation for silver's explosive year is built on several strong pillars. The market is grappling with significant supply constraints and critically low inventories at global warehouses. Simultaneously, demand is soaring from both the industrial sector—where silver is used in electronics, solar panels, and automotive applications—and from investors seeking a tangible asset. A major boost to investor sentiment came from silver's recent inclusion on the US critical minerals list, highlighting its strategic importance.
The broader financial environment has also been exceptionally supportive. Traders are currently pricing in two interest rate cuts by the US Federal Reserve next year. This expectation weakens the US dollar and makes non-yielding assets like gold and silver more attractive. The US dollar index hovered near two-month lows on Monday, providing additional lift to bullion prices.
Gold Holds Near Peaks, Platinum Touches Record
While silver stole the spotlight, other precious metals also showed significant strength. Gold prices eased slightly after scaling fresh highs in the previous session. Spot gold dipped 0.1% to $4,527.79 per ounce by 1152 GMT on December 28, after having touched a record $4,549.71 earlier. US gold futures for February delivery held steady at $4,553.10 an ounce.
Gold's sustained rally in 2025, climbing 72% year-to-date, is supported by central bank purchases aimed at diversification away from US securities, ongoing geopolitical tensions, and rising investments in exchange-traded funds (ETFs).
In a notable parallel move, platinum briefly touched a record high as well. Spot platinum reached $2,478.50 an ounce before slipping 0.8% to $2,429.10. Palladium edged up marginally by 0.1% to $2,003.83 an ounce. The synchronized strength across the precious metals complex underscores a broad-based investor shift towards hard assets amid a shifting macroeconomic and geopolitical landscape.
