Gold and silver at new heights: what happens next?
2025 has been a record-breaking year for precious metals such as gold and silver. Driven by a combination of macroeconomic and geopolitical factors, both metals have set new all-time highs multiple times. Gold rose by more than 67% over the course of 2025, while silver rose by more than 150%. The beginning of 2026 has seen similar growth, with gold up over 16% and silver up by more than 41%. On Sunday January 25, 2026, gold reached a major, long-awaited milestone of $5,000 per troy ounce. At the time of writing, the yellow metal has climbed further, sitting right below $5,100. Silver broke the $100 threshold on January 23. At the time of writing the price has surged to almost $110. Will this rally continue or are the precious metals overheating?
What are the driving factors of the continued rally?
Over the last year the geopolitical climate has been changing and filled with unexpected events. These include US President Trump’s Liberation Day Tariffs, instability in the Middle East, US intervention in Venezuela and, most recently, internal conflicts within NATO, with President Trump claiming that Greenland should belong to the US. In times of uncertainty, investors typically seek refuge in so-called safe havens, such as gold and silver. Over the course of 2025, the US dollar has weakened significantly against major currencies, with the EUR/USD exchange rate increasing by almost 14% over the last 12 months. As gold is traditionally priced in US dollars, a weaker dollar often results in a higher gold price. Last week’s events surrounding Greenland resulted in the dollar weakening further against the Euro, with the EUR/USD exchange rate rising from approximately 1.157 on Monday January 19, to around 1.184 at the time of writing on January 26. The debasement trade, whereby investors are increasingly reducing their exposure to US dollars, has resulted in significant investment in the yellow metal pushing the price further up.
The current instability and global geopolitical tensions are perhaps the most significant drivers of the meteoric movements in the price of precious metals. There are almost weekly new tariff announcements, increasing the fear of further trade disputes and US political instability. This combined with the shrinking confidence in fiat currencies and increased demand for AI and data center purposes has driven the price of precious metals up significantly. Gold and silver are traditionally considered conservative safe-haven investments yielding around 10-11% per year, similar to indices such as the broad S&P 500. However, over the last year, precious metals have outperformed the S&P 500 many times over, with silver soaring above 250% compared to the index’s almost 14%. Gold has also performed strongly, rising by over 83% in the last 12 months. Vontobel offers a wide range of leverage products with gold as underlying, and you can gain both long and short exposure depending on your view.
The road ahead
Following an historic surge that has pushed gold and silver to new all-time highs, investors are now turning their attention to what comes next. Last week’s price movements, which saw both gold and silver surpass long-awaited levels, marked a turning point for these precious metals. The Federal Reserve is widely expected to hold interest rates steady at its first meeting of 2026, which is set to take place on January 27 and 28. However, if the Federal Reserve were to cut the rates, the opportunity cost of holding precious metals would be lower, potentially leading to further price jumps in the price of gold and silver. Developments in geopolitics and international relations will likely determine how the future price movements. Will the precious metals rally continue or has the party come to an end?
Risks
Credit risk of the issuer:
Investors in the products are exposed to the risk that the Issuer or the Guarantor may not be able to meet its obligations under the products. A total loss of the invested capital is possible. The products are not subject to any deposit protection.
Currency risk:
If the product currency differs from the currency of the underlying asset, the value of a product will also depend on the exchange rate between the respective currencies. As a result, the value of a product can fluctuate significantly.
Market risk:
The value of the products can fall significantly below the purchase price due to changes in market factors, especially if the value of the underlying asset falls. The products are not capital-protected
Product costs:
Product and possible financing costs reduce the value of the products.
Risk with leverage products:
Due to the leverage effect, there is an increased risk of loss (risk of total loss) with leverage products, e.g. Bull & Bear Certificates, Warrants and Mini Futures.
Disclaimer:
This information is neither an investment advice nor an investment or investment strategy recommendation, but advertisement. The complete information on the trading products (securities) mentioned herein, in particular the structure and risks associated with an investment, are described in the base prospectus, together with any supplements, as well as the final terms. The base prospectus and final terms constitute the solely binding sales documents for the securities and are available under the product links. It is recommended that potential investors read these documents before making any investment decision. The documents and the key information document are published on the website of the issuer, Vontobel Financial Products GmbH, Bockenheimer Landstrasse 24, 60323 Frankfurt am Main, Germany, on prospectus.vontobel.com and are available from the issuer free of charge. The approval of the prospectus should not be understood as an endorsement of the securities. The securities are products that are not simple and may be difficult to understand. This information includes or relates to figures of past performance. Past performance is not a reliable indicator of future performance.
© Bank Vontobel Europe AG and/or its affiliates. All rights reserved.