Precious metals experience significant declines after record-setting year

Wednesday 31 December 2025 - 11:50

By: Dakir Madiha

Precious metals experience significant declines after record-setting year

The prices of silver, platinum, and palladium plummeted on December 30, marking a tumultuous conclusion to a year characterized by extraordinary highs for these precious metals. Investors capitalized on their gains amid a volatile environment, significantly reducing their positions after seeing remarkable increases earlier in the week.

Silver experienced a decline of over 3%, falling to $73.66 an ounce, after briefly peaking at an all-time high of $83.62. Platinum saw a more drastic drop of 12%, settling at $1,932.55 an ounce, while palladium fell by more than 7%, ending at $1,497.75. Analysts attributed these substantial decreases largely to profit-taking, exacerbated by less active trading conditions at year-end which intensified price fluctuations.

The decline in silver prices was further influenced by the Chicago Mercantile Exchange's decision to raise margin requirements for silver futures contracts to $25,000 representing the second increase of the month. Market analysts noted that these heightened requirements likely triggered forced liquidations among leveraged traders, intensifying the drop in price. “The severity of silver’s decline may have been compounded by the Chicago Mercantile Exchange’s overnight margin hike,” reported Kitco News.

Despite the steep setbacks, the outlook for precious metals remains strong, anticipating the best annual performances in decades. Gold, stabilizing around $4,335 an ounce, is set for its largest annual gain since 1979, with an increase of approximately 66%. Silver is poised to achieve its highest recorded year with gains exceeding 150%, while platinum is also up with over 110% for the year.

The late-year rally in precious metals was driven by a combination of factors, including escalating geopolitical tensions, a weakened U.S. dollar, expectations of Federal Reserve rate cuts, and persistent supply deficits. Silver has faced its fifth consecutive year of supply shortages, with industrial demand from solar panels, electric vehicles, and data centers outpacing mining production. Central banks continued aggressive gold purchasing throughout 2025, projected at 850 tons, while platinum and palladium have benefited from tight supply in automotive catalysts.

Market analysts believe the recent correction, though dramatic, signifies a healthy pause rather than the end of a bull market. "While this may signal a peak for precious metals, silver and gold are both still in bullish trends, with the pullback respecting key technical support levels," said Kyle Rodda of Capital.com to ABC News Australia.