Gold and silver continued their impressive ascent on the first trading day of 2026, extending their best annual performance since 1979, even as Wall Street maintains a bullish long-term outlook while cautioning about a potential near-term headwind.
Prices for gold approached $4,400 per ounce, while silver climbed back above $74. Although traders suggest precious metals could perform well in 2026, buoyed by expectations of further U.S. interest rate cuts and a weaker dollar, recent market concerns indicate that broad index rebalancing might exert downward pressure on prices. Given the substantial previous gains, passive tracking funds may be compelled to sell some contracts to align with newly confirmed weightings.
"The precious metals market is starting 2026 in much the same way as 2025 played out, that is, with forward momentum," said Tim Waterer, Chief Market Analyst at KCM Trade. "Precious metals appear to be making up for the year-end selling that troubled them earlier this week. The year-end position-squaring pressure has subsided, and now fundamentals are back in focus, with gold set to begin 2026 on a positive note."
Precious metals experienced a ferocious rally last year, despite significant volatility emerging in late December as some investors took profits and technical indicators signaled overbought conditions. Supported by central bank purchases, the Federal Reserve's accommodative policy, and a softer U.S. dollar, gold achieved a series of record highs in 2025. Furthermore, safe-haven demand stemming from geopolitical tensions and U.S.-led trade frictions provided additional support.
In 2025, silver's surge was even more dramatic than gold's, not only setting new all-time highs but also breaking through levels previously thought unimaginable by all but the most fervent market observers. In addition to the factors boosting gold, silver benefited from persistent market concerns that the U.S. government might eventually impose import tariffs on refined metal.
Nevertheless, Daniel Ghali, a Senior Commodity Strategist at TD Securities, wrote in a report, "We anticipate that up to 13% of the total open interest in the Comex silver market could be sold over the next two weeks, which would lead to a significant price revaluation to the downside." He added that lower post-holiday liquidity could amplify price swings.
Among major banks, bullish calls for this year's gold price remain predominant, especially considering expectations for further Fed rate cuts and President Trump's reshaping of the Fed's leadership. Last month, Goldman Sachs stated that its baseline forecast is for gold to rise to $4,900 per ounce, with risks skewed to the upside.
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