All that glitters is not gold
Good or bad news? The answer to this depends on whether we are assessing the causes or the outcomes, but it is one of the year’s most remarkable market phenomena – gold is again breaking one record after another. Having exceeded USD 4,330 per ounce on 17 October 2025[1], it has chalked up a rise of 65% over the year – way outstripping the performance of bitcoin – and 162% over 3 years, on a rising trend that started at the end of 2022. The FTSE Gold Mines index has bettered this move with a rise of 177% for the year!
The causes of this surge are sadly grounded in worries rather than in euphoria, with doubts about the value of the US dollar featuring as one of the most obvious. The dollar’s credibility is based on the independence of the US central bank, which has been undermined by the US President’s considerable pressure on it to cut its key rates whilst US inflation remains slightly too high. On top of this self-inflicted wound on the dollar come China’s efforts to compete with it, manifested in its central bank’s insatiable appetite for gold – a trend that is certainly not set to reverse any time soon. The war between Russia and Ukraine is also exacerbating this rush into gold as a safe haven investment. Poland – particularly affected by this conflict – holds the record for gold purchases by central banks in 2025. Other Eastern European countries are following the same strategy, albeit with lower volumes of purchases. Lastly and most recently, the tribulations of a number of regional US banks have served as a reminder – probably wrongly – of the difficulties of this sector in 2023, and have strengthened fears of turbulence in the country’s banking sector, pushing gold a notch higher.
But gold is not the only metal to flourish on the back of the world’s conflicts. Silver has achieved an even more stunning breakthrough, to over USD 53 per ounce on 17 October, up 87% over the year, and 190% over 3 years. It would be simplistic to explain silver’s rise purely as a reflection of that of gold. Of course, the silver price is generally correlated to that of gold, but with one key difference – central banks do not buy silver as its value relative to its volume, and therefore to its storage cost, is too low. We must therefore look for the reasons for silver’s return to grace elsewhere than in government purchases. One reason lies in its role in electric circuit boards. Silver is an excellent conductor of electricity and is a key element in the production of solar panels – growing massively in China – and in certain electronic components, which are expanding rapidly amidst the global race for computing capacity. However, it is not simply an industrial metal: it also serves as a safe haven, not for central banks of course, but for private or even institutional investors. The metal volumes held by silver ETFs have thus surged recently to reach over 800 million ounces, up 17% since the start of the year. Despite this rise, silver is not overvalued against gold, which currently trades at 79x the price of silver, versus an average of 68x over the last 27 years. This suggests that silver could outperform gold
and see a new “golden age”, thanks to both its industrial and financial attributes.