Gold and silver prices are about to hit their biggest annual increase in 46 years due to the triple resonance of safe-haven demand, central bank buying, and the weakening US dollar

The Zhitong Finance App learned that gold and silver prices will soon record their biggest annual increase since 1979 in 2025. After the trend was relatively stable at the beginning of the year, precious metal prices clearly accelerated in late April. The background was that the global tariff policy introduced by the Trump administration caused market shocks and heightened investors' concerns about trade prospects and the status of the US dollar.

According to the data, the cumulative increase in gold prices in 2025 is close to 70%, and silver has increased by more than 160% since this year, of which it has risen by more than 30% in December alone. The market generally believes that the uncertainty of the Trump administration's trade policy may weaken the global appeal of the US dollar, thereby driving capital flows to precious metals regarded as “safe-haven assets.”

In stark contrast to precious metals is the trend of the US dollar. Since 2025, the US dollar has fallen by more than 9% against a basket of major currencies such as the euro and yen. Analysts pointed out that the weakening of the US dollar has further amplified the upside of gold and silver denominated in US dollars.

Analysts at RBC Capital Markets said in the December 22 report that the main reason for the rise in gold this year is that “central banks and investors are more appreciating the attributes of gold as a non-sovereign asset.” They believe that the current macroeconomic environment also has many factors that have historically driven the upward trend in gold prices.

Continued purchases by central banks around the world also provided solid support for gold prices. The data shows that central banks have been net buyers of gold for several months in a row. In October (latest available data), the central bank increased its gold holdings by a total of 53 tons. Large-scale purchases tightened marketable supply to a certain extent and boosted overall prices.

Furthermore, after Trump's so-called “Liberation Day” tariff policy was announced, traders and a number of large banks quickly shipped gold and silver inventories to the US in an attempt to complete the layout before the tariffs officially came into effect. London has always been the most important precious metals clearing center in the world, and in recent years, New York has also added a large number of treasury facilities, and many of the metal stocks that flowed into the US before tariffs at the beginning of the year still remain there.

The upward logic of silver has both risk aversion and industrial properties. Silver is widely used in electronic circuits, switches, electric vehicles and solar energy products, benefiting from the expansion of new energy and industrial demand. However, since the price is much lower than gold (currently around $77 per ounce, compared to over $4,300), silver is more volatile and more susceptible to retail transactions.

On December 26, Tesla (TSLA.US) Musk posted on social networking platform X that the sharp rise in silver prices was “not a good thing,” and pointed out that silver is a key material in many industrial processes. Affected by this statement, silver prices fell for a while, but then strengthened again. After falling more than 8% in a single day on Monday, it rebounded about 10% intraday on Tuesday.

Gold also experienced a phased correction. The price of gold fell by more than 4% on Monday and rebounded slightly on Tuesday. Chris Waterbury, derivatives manager at Carson Wealth Management, said that the profit settlement and news about peace progress in Ukraine may be an important catalyst for the short-term decline in gold prices. On Monday, Trump and Ukrainian President Zelensky held talks on the Russian-Ukrainian conflict. Both sides sent signs of relative optimism after the meeting.

In terms of capital flow, precious metals ETFs continue to attract investors. The world's most famous gold ETF, SPDR Gold Shares (GLD.US), has recorded a net inflow of more than 20 billion US dollars since this year; the main silver ETF iShares Silver Trust (SLV.US) also had an inflow of close to 3.5 billion US dollars during the year. The World Gold Council pointed out that overall gold ETFs have achieved net capital inflows for five consecutive months until November, which also shows that ordinary investors are actively participating in this round of precious metals markets through ETFs.