Metals hit historic highs as gold and copper soar in 2025

Wednesday 31 December 2025 - 11:20

By: Dakir Madiha

Metals hit historic highs as gold and copper soar in 2025

Gold and copper concluded 2025 with record-breaking performances, marking significant annual gains driven by a combination of monetary policy shifts, soaring industrial demand, and geopolitical uncertainties. Gold surged over 64% this year, trading around $4,330 per ounce, reflecting its steepest annual growth since 1979, when prices soared due to the Iranian Revolution. Meanwhile, copper achieved a 41% increase on the London Metal Exchange, representing its best showing since 2009, bolstered by electrification and advancements in artificial intelligence.

The precious metal's rally was accelerated by the U.S. Federal Reserve's decision to lower interest rates three times in 2025, which reduced borrowing costs and heightened the appeal of non-yielding assets. Gold reached an all-time high of $4,549.71 per ounce on December 27, though it experienced a slight decline in subsequent trading.

Central bank purchases provided consistent support throughout the year, with institutions adding approximately 900 tons of gold to their reserves. China, Poland, Turkey, and India led these purchasing efforts as part of a broader strategy to diversify away from dollar-denominated assets. Manoranjan Sharma, chief economist at Informerics Ratings, commented that persistent official purchases have created a structural floor beneath gold prices, even in the context of rising global interest rates.

Silver outperformed gold, soaring by 150% to reach a record $83.62 per ounce before retreating. The metal benefitted from both safe-haven demand and industrial consumption linked to solar panels, electric vehicles, and data centers.

Copper's price rise reflected structural changes in global energy infrastructures. The metal hit a record $12,960 per ton on the London Metal Exchange, driven by increasing demand from electric vehicles, renewable energy projects, and AI-powered data centers. Cristina Bko, head of investor relations and sustainability at Prysmian, the world's largest cable manufacturer, stated that demand for copper is shifting from cyclical to more structural. BloombergNEF warned that AI data centers alone will consume an average of 400,000 tons of copper per year over the next decade, potentially creating a supply deficit of six million tons by 2035.

The announcement by President Donald Trump in July of a 50% tariff on certain copper imports initially caused prices in the U.S. to spike; however, this tariff ultimately excluded raw materials, leading to a collapse in domestic premiums.

Looking ahead to 2026, analysts expect the momentum for precious metals to continue, with some forecasting that gold could reach $5,000 per ounce by the first quarter of 2026. Ilya Spivak of Tastylive noted that the factors driving gold prices have become self-sustaining. As for copper, supply constraints remain critical, as mining output struggles to keep pace with electrification demands. Egest Balla, a wire and cable analyst at CRU, warned that while green energy initiatives are commendable, lacking a supportive grid system will pose challenges.