Markets end 2025 with silver briefly hitting $84 and cautious optimism
LONDON (December 29) Global equities opened the final trading week of 2025 with a generally positive tone as investors focused on sentiment around monetary policy and light holiday volumes.
Asian markets rallied, with South Korea's Kospi climbing and Taiwan advancing on expectations that the Federal Reserve (Fed) will be cutting rates next year.
US futures were relatively steady reflecting robust S&P 500 and record Dow Jones levels, with technology names remaining in technical "buy" zones.
European equities positioned for modest gains but gave back most in the first hour of trading on Monday morning.
Precious metals cap extraordinary year
Precious metals continued to capture attention. Silver briefly surpassed $84.00 per ounce before pulling back amid volatile trading.
Silver daily candlestick chart
Source: TradingView
Gold maintained elevated levels on track for its strongest annual performance in decades. For a more detailed analysis of the potential future direction of the gold price, please read https://www.ig.com/uk/news-and-trade-ideas/when-may-the-gold-price-reach--5-000--251223
Gold monthly candlestick chart
Source: TradingView
Industrial metals also posted notable strength, with copper prices on course for their largest annual rise in more than a decade, supported by structural supply constraints, demand tied to renewable energy and electrification trends.
Copper weekly candlestick chart
Source: TradingView
Energy markets reflect geopolitical tensions
Energy markets showed upward pressure as geopolitical developments influenced crude pricing with Brent crude oil registering modest gains amid renewed Middle East tensions and evolving Ukraine peace negotiations.
Energy equities exhibited mixed responses, with some underperforming despite rising oil prices, illustrating the nuanced impact of broader risk sentiment and sector-specific dynamics.
Oil market participants are watching supply risks closely as 2026 approaches.
Currency moves reflect policy divergence
The US dollar hovered near multi-month lows, supported by markets pricing in Fed rate cuts next year while the Japanese yen gained on hawkish guidance from the Bank of Japan (BoJ).
European sovereign bond spreads continued to narrow, with Italy and Spain's borrowing costs reaching lows not seen in over 15 years as investor confidence in peripheral eurozone debt improved.
Global treasury yields exhibited relative stability even as central bank outlooks remain in focus.
Economic data shows moderation
Recent indicators pointed to slower gross domestic product (GDP) growth in key regions and marginal labour market weakening with consumer spending showing softness and unemployment edging higher.
Business confidence measures, however, preserved a resilient outlook for economic activity in the near term, keeping policymakers and investors alert to incoming December and early-2026 data that could influence next year’s rate paths.
Trading opportunities into 2026
Looking ahead, market participants are balancing optimism with caution as 2026 approaches.
Equity valuations at year-end levels, record commodities performance, and subdued volumes suggest thin liquidity may amplify volatility in the first trading days of the new year.
Key scheduled events include the release of detailed Federal Reserve (Fed) meeting minutes and forthcoming US housing, energy inventory reports, initial jobless claims and purchasing managers indices (PMI), which are likely to further shape cross-asset positioning.
With central bank policy expectations diverging across regions, markets are poised for a dynamic start to 2026.
Beware that thin liquidity may amplify volatility in early 2026, though.
IG
