Financial markets witnessed a significant rally in precious metals on Monday, 29th December 2025, with silver spearheading the charge. The surge comes as investors increasingly anticipate interest rate cuts from the US Federal Reserve in the coming year, driving demand for non-yielding assets.
Metals Shine on Dovish Fed Expectations
Silver prices leapt by nearly 4%, marking one of the standout performances across commodity markets. The sharp increase reflects a broader bullish sentiment towards precious metals, which are often seen as a hedge against inflation and currency devaluation. Analysts point to recent commentary from the Federal Reserve, which has signalled a potential shift towards a more accommodative monetary policy stance in 2026.
Gold, the traditional safe-haven asset, also saw robust buying interest, firming its position above key psychological levels. The simultaneous rise in both metals underscores a market-wide recalibration of expectations, with traders betting that lower borrowing costs will diminish the appeal of interest-bearing assets and boost the lustre of physical bullion.
Oil and Geopolitics Add to Market Mix
While metals captured headlines, energy markets were also on the move. Oil prices advanced, buoyed by a combination of supply concerns and the broader risk-on mood stemming from hopes for cheaper money. The price of Brent crude, a global benchmark, traded higher, adding pressure on consumer inflation prospects worldwide.
Beyond raw economics, the geopolitical calendar commanded attention. Markets were keenly awaiting a scheduled meeting between former US President Donald Trump and Ukrainian President Volodymyr Zelenskyy. The outcome of this discussion is viewed as a potential catalyst for regional stability and, by extension, global energy and commodity flows.
Implications for Investors and the Global Economy
The day's price action sends a clear signal about market priorities. The powerful rally in silver and gold suggests that investors are actively positioning for a new phase in the economic cycle, one dominated by rate cuts rather than hikes. This has profound implications for currency valuations, mining stocks, and portfolio allocation strategies.
However, the concurrent rise in oil prices presents a complicating factor for central banks. Higher energy costs could stall progress on inflation, potentially forcing policymakers like the Fed to reconsider the pace or timing of any monetary easing. This delicate balance between supporting growth and controlling prices will be the defining narrative for markets in early 2026.
Furthermore, the high-stakes diplomacy between Trump and Zelenskyy reminds investors that geopolitical risk remains a potent market driver. Any signs of escalating or de-escalating conflict in Eastern Europe will have immediate repercussions for commodity prices and global risk appetite.
