Gold, silver shined in 2025, can the luster hold in 2026?

Core Viewpoint - The precious metal market, particularly gold, experienced significant gains in 2025, with gold rising over 66% and reaching approximately $4,325 per ounce by year-end, marking the best percentage gain since 1979 [1][9]. Gold Market Insights - Bank of America forecasts gold prices to reach $5,000 per ounce, driven by continued central bank buying, rising U.S. fiscal deficits, and a weaker U.S. dollar, which fell over 6% in 2025 [2][3]. - The bullish sentiment in the gold market is supported by the absence of factors that typically end bull markets, according to Bank of America strategist Michael Widner [3]. Performance of Other Precious Metals - Silver also had a record year, gaining over 142%, while copper advanced by over 41%, marking the largest one-year gains since 2009 [8][9]. - Exchange-traded funds linked to these precious metals mirrored the gains seen in the underlying metals during 2025 [9]. Federal Reserve Actions - The Federal Reserve cut interest rates for the third consecutive time in December 2025, indicating a potential resumption of treasury buying, which may support the precious metals market [15][16]. - Reserve management purchases are expected to amount to $40 billion in the first month, with the potential for elevated levels to alleviate near-term pressures in money markets [15]. Market Sentiment - MacroMavens president Stephanie Pomboy expressed surprise at the rapid rise in precious metal prices but anticipates further increases, attributing this to a shift towards hard assets over paper assets [12].