Gold and silver prices have surged to record levels in 2025 as investors flock to safe-haven assets amid economic uncertainty and geopolitical tensions. On Monday, gold traded above $4,400 (£3,275) an ounce for the first time, while silver also reached historic highs, reflecting growing demand for precious metals.

Gold Surges on Interest Rate and Geopolitical Concerns

Gold began the year at around $2,600 an ounce but has climbed steadily, rising more than 68% in 2025—the steepest annual increase since 1979, according to Adrian Ash, director of research at BullionVault.

Analysts say the surge in gold prices is driven by a combination of factors: expectations of further US interest rate cuts, global trade tensions, and geopolitical instability. Ash highlighted the influence of US President Donald Trump’s policies, including trade tariffs and criticism of the Federal Reserve, as key drivers behind investor interest in gold.

“The precious metals market says that President Trump has really triggered something – and gold has gone crazy this year,” Ash explained.

On Monday, gold’s spot price peaked at $4,426.66 an ounce, marking a historic milestone for the metal.

Why Investors Are Turning to Gold and Silver

Lower interest rate expectations typically mean reduced returns on traditional investments like bonds, prompting investors to diversify into commodities such as gold and silver. Analysts predict that the US Federal Reserve will cut rates twice in 2026, which could continue to support precious metal prices.

Central banks are also increasing their physical gold holdings to hedge against economic turbulence, reduce reliance on the US dollar, and diversify reserves, according to Goldman Sachs. This trend is expected to continue into 2026.

“Gold tends to respond first as the primary monetary metal when confidence in financial assets and policy stability starts to wobble,” said Anita Wright, chartered financial planner at Ribble Wealth Management.

A weaker US dollar has further contributed to rising gold prices, making the metal cheaper for overseas buyers and increasing global demand.

Silver and Other Precious Metals Also Reach Records

Silver has also had a stellar year, with its price hitting $69.44 an ounce on Monday. For 2025 so far, silver is up 138% year-to-date, while platinum has reached a 17-year high, outperforming gold in terms of growth.

Unlike gold, silver, platinum, and other precious metals are widely used in industrial applications, adding to demand and supply pressure. Analysts note that constrained supply in combination with rising industrial demand has been a major factor in these metals’ price surges.

Broader Commodity Market Trends

Other commodities have experienced mixed results. Oil prices rose on Monday following US enforcement measures against Venezuelan oil tankers, with Brent crude up $1.31 at $61.78 a barrel and US oil at $57.77. However, despite these recent gains, oil prices are projected to close 2025 below their starting levels for the year.

What This Means for Investors

The dramatic rise in precious metals highlights the growing trend of using gold, silver, and platinum as financial safety nets during periods of economic and political uncertainty. For investors looking to hedge against inflation, diversify portfolios, and manage risk, precious metals have emerged as a preferred choice in 2025.