China Post Securities stated in a research report that gold may be the standout performer in 2025, driven by its role as an alternative to U.S. Treasuries. As expected, precious metals emerged as the brightest spot in the nonferrous metals sector this year, with gold repeatedly setting new all-time highs and stabilizing above $4,000 per ounce. Silver, benefiting from liquidity dynamics, outperformed gold with even greater gains.
The report outlined two key phases for precious metals in 2025: 1. **Diversification-Driven Rally (Early 2025)**: Demand for diversified reserve assets, spurred by tariff expectations under the Trump administration, led to synchronized movements in Treasury yields and gold prices. London gold surged past $3,500/oz in April, significantly outpacing silver. 2. **Rate-Cut Rally (Mid-August Onward)**: Markets began pricing in Fed rate cuts in H2, triggering heavy inflows into Western gold ETFs. Volatility in assets like Bitcoin further boosted precious metals' appeal, pushing gold above $4,300/oz and silver to $55/oz—with silver outperforming gold and narrowing the gold-silver ratio.
**2026 Outlook: Gold** China Post Securities expects gold’s uptrend to persist, potentially exceeding expectations due to: 1. **Eroding Dollar Credibility**: The U.S. *National Security Strategy* report (Dec 4, 2025) hinted at multipolarity, undermining dollar confidence. Long-term Treasury supply-demand imbalances may sustain gold’s appeal as a hedge. 2. **Rising Reflation Risks**: Post-September rate cuts, a further 25bp reduction in December—coupled with tariffs—could reignite inflation, lifting gold while elevated long-term yields reflect such expectations. 3. **Continued ETF Inflows**: Historical trends suggest U.S. and European gold ETFs will attract more capital amid dovish Fed policies and balance sheet expansion.
**2026 Outlook: Silver** Silver’s 2025 outperformance stemmed from improved risk sentiment and its tangible-asset appeal. With five consecutive years of supply deficits, its fundamentals may surpass even copper’s. Central bank diversification into silver (despite PBOC inaction) has added monetary attributes, fueling speculative demand and price surges. In 2026, dwindling inventories and reserve-asset demand could exacerbate physical shortages, amplifying price volatility.
**Risks**: Unexpected U.S. economic shifts or geopolitical changes may alter projections.
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