Gold, silver prices slip on year-end profit booking but set for record 2025 gains

Gold and silver prices traded lower on Wednesday (December 31) as investors booked profits near all-time highs, but both metals remained on track to end 2025 with historic annual gains. This stresses a year marked by aggressive monetary easing expectations, geopolitical risks and strong investment demand.

Spot gold slipped 0.3% to about $4,334 an ounce in early Asian trade, after touching a record $4,549.71 an ounce last week. US gold futures for February delivery fell around 1% to $4,346.50 an ounce.

The pullback came as the US dollar firmed to a more than one-week high in the previous session, making dollar-priced bullion more expensive for holders of other currencies.

Despite the day’s decline,

gold has rallied about 66% in 2025, putting it on course for its strongest annual performance since 1979.

Markets have drawn support from expectations of lower interest rates, geopolitical conflicts, sustained central bank buying and rising inflows into gold-backed exchange-traded funds.

Minutes from the US Federal Reserve’s December meeting showed policymakers agreed to cut rates only after a nuanced debate on economic risks. The Fed’s next meeting is scheduled for January 27–28, with investors largely expecting rates to remain unchanged.

Historically, non-yielding assets such as gold tend to benefit in low interest-rate environments.

In India, domestic prices showed relative resilience.

Jateen Trivedi, Vice President (Research) – Commodity and Currency at LKP Securities, noted that heavy profit booking near all-time highs, higher margin requirements and cautious positioning have capped upside momentum. Trivedi expects gold to remain volatile in the near term, with a higher trading range of roughly ₹1.32 lakh per 10 grams to ₹1.38 lakh per 10 grams.

Silver saw sharper losses on Wednesday. Spot silver dropped 2.7% to around $74.41 an ounce after hitting an all-time high of $83.62 an ounce earlier in the week. Even so, silver has surged about 157% so far this year, far outpacing gold and marking its strongest annual performance on record.

Analysts attribute silver’s rally to a combination of strong investment flows, supply constraints and rising industrial demand, particularly from renewable energy and technology sectors, after the metal broke through several key price milestones during the year.

Market participants remain divided on the outlook for 2026.

Ross Maxwell, Global Strategy Operations Lead at VT Markets, said gold is likely to remain the preferred core allocation for investors due to its relative stability, role as a monetary hedge and continued support from central bank demand. He added that while silver offers higher upside potential, it carries greater volatility because of its sensitivity to industrial demand.

According to Maxwell, any near-term correction after this year’s strong run could reset valuations and create entry opportunities, provided underlying risks such as fiscal stress, currency credibility and geopolitical tensions persist.

-With Reuters inputs