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Gold (GC=F) and silver (SI=F) swung downward Wednesday, but 2025 will go down as one of the best years for the metals in decades.
Gold futures fell to about $4,350 per troy ounce, while silver futures tumbled roughly 10% after the Chicago Mercantile Exchange raised margin requirements on precious metal contracts for a second time in a week, forcing out leveraged positions.
Even with the late-year volatility, gold has surged around 65%, while silver has more than doubled this year, marking their strongest gains since 1979. Platinum (PL=F) and copper (HG=F) also roared higher in 2025 amid a global AI boom and efforts to onshore manufacturing.
“We’re in a metals war,” Josh Phair, founder and CEO of precious metals manufacturer and distributor Scottsdale Mint, told Yahoo Finance.
Phair pointed out that the trend for countries to secure metal resources started with gold, with central bank buying accelerating over the past few years.
Silver and copper have also shot up in recent months as the US added them to its critical minerals list, considered vital to the US economy and national security.
“These data centers that are getting created so fast in the United States, the US has to have it [silver] to protect its position in the world,” Phair added.
Meanwhile, China, the third-largest silver mining country, is expected to restrict silver exports starting Jan. 1, further raising worries of a supply crunch.
“China is restricting its exports. That means other places in the world are going to have to find the metal somewhere,” Phair said.
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Roughly 60% of the world’s silver is used for industrial applications, from solar panels to data center components to electric vehicle batteries, according to the Silver Institute, a trade organization.
In October, Samsung (005930.KS) struck a $7 million deal to secure future silver supply from a Mexican mine, underscoring the need for the precious metal.
While some strategists warn of a “stretched trade” in precious metals, Phair pointed out that when adjusted for inflation, silver is still “cheap.”
“Silver’s probably been too cheap for a long time, and that’s the other driver of this,” he said.
He added, “If you adjust the old high of $50 in 1980 for inflation, it’s over $200. So, you could even say that these prices today are still kind of pathetic.”
The rise in the price of metals this year comes as the US dollar (DX-Y.NYB) has weakened nearly 10% and the Federal Reserve lowered interest rates three times in 2025.