ISLAMABAD: Gold prices remained steady on Wednesday, even as the yellow metal stayed on course for its strongest annual performance in more than four decades. At the same time, other precious metals fell sharply as investors locked in profits following a powerful, record-breaking rally seen throughout 2025.
Spot gold traded flat at $4,345.75 per ounce at 0404 GMT, after reaching an all-time high of $4,549.71 on Friday. Meanwhile, US gold futures for February delivery slipped 0.5 per cent to $4,365 per ounce. Despite the modest pullback, bullion has surged 66 per cent so far this year, marking its biggest annual gain since 1979, when geopolitical upheaval, including the Iranian revolution, pushed prices sharply higher.
Analysts attributed gold’s remarkable performance to a combination of factors. These include interest rate cuts by major central banks, expectations of further easing by the US Federal Reserve, persistent geopolitical tensions, strong central bank buying, and rising inflows into gold-backed exchange-traded funds. Together, these drivers have supported sustained investor demand for the non-yielding asset.
Market factors pressure other precious metals
While gold held firm, other precious metals faced notable selling pressure. Analysts said recent declines were largely driven by technical factors and thin holiday trading conditions rather than a fundamental shift in outlook.
According to market participants, an increase in margin requirements on metals futures added to the pressure. Ilya Spivak, head of global macro at Tastylive, said adjustments announced by the CME proved painful for precious metals earlier in the week, particularly given low liquidity during the holiday period.
Additionally, the US dollar strengthened to a more than one-week high, making dollar-priced commodities more expensive for holders of other currencies. This move added further headwinds for precious metals in the short term.
Minutes from the Federal Reserve’s December meeting showed policymakers agreed to cut interest rates only after extensive debate. Nevertheless, traders continue to price in two additional rate cuts next year. Historically, lower interest rate environments tend to favour assets like gold that do not offer yields.
Silver, platinum and palladium retreat after record runs
Silver prices fell sharply, with spot silver dropping 4.5 per cent to $73.06 per ounce after touching a record high of $83.62 earlier in the week. Despite the decline, silver has gained more than 150 per cent in 2025, far outperforming gold and positioning itself for its strongest year on record. The rally has been supported by its designation as a critical US mineral, tight supplies, low inventories, and rising industrial and investment demand.
Similarly, spot platinum slid 6.1 per cent to $2,065.80 per ounce after hitting a lifetime high of $2,478.50. Platinum has risen more than 120 per cent this year, marking its best annual performance ever. Palladium also fell 7.1 per cent to $1,496.75 per ounce, although it remains up 65 per cent for the year, its strongest gain in 15 years.
Looking ahead, analysts believe gold’s momentum may persist. Spivak said prices could test $5,000 per ounce toward the end of the first quarter of 2026, as the factors driving gold over the past year appear increasingly self-sustaining.
