Gold Price Steady Climb and the Sudden Surge of Silver and Copper: Will Their Bull Run Extend Into 2026?

TradingKey - In 2025, gold prices steadily climbed, posting a stunning 56% gain; silver's rally was even more potent, surging over 100% year-to-date and breaching the $61 mark. Since November, copper prices have also taken flight, recently hitting successive record highs, with LME three-month copper futures touching a new peak of $11,771 per ton on December 8.

Dow Jones Market Data shows this marks the first time since 1980all three metals—gold, silver, and copper—simultaneously refreshed their all-time highs in the same year. Will this rally extend into 2026?

Gold's Ascent: Economic Uncertainty, Rate Cuts, and Central Bank Purchases

Gold prices have repeatedly broken historical highs since 2025, now standing above $4,000 an ounce and holding firm. This surge is primarily driven by gold's safe-haven appeal.

Firstly, escalating geopolitical and tariff risks have intensified market flight to safety.

On April 1, following Trump's tariff policy announcement, dollar-denominated assets suffered historic blows. US equities saw approximately $6.6 trillion wiped off their total market capitalization on April 3-4, marking the largest two-day decline ever and pushing the market into a bear phase. Concurrently, the dollar fell sharply, losing nearly 5% that month. The VIX volatility index briefly surged past 50, signaling extreme market panic.

Notably, April also witnessed a rare"triple whammy" in the US, with equities, Treasuries, and the dollar all declining simultaneously. Typically, when US stocks fall, Treasuries and the dollar act as safe havens, drawing capital outflows and strengthening. However, this time, the exposure of US credit asset fragility prompted capital to flee the US, seeking refuge in alternative safe havens like gold.

Gold's ascent was further fueled by escalating geopolitical conflicts, including the Israel-Iran confrontation and the Russia-Ukraine war, which have endowed the metal with a higher risk premium.

Furthermore, the Federal Reserve's resumption of rate cuts and the start of a global easing cycle represent another significant backdrop for gold's rally.In September, the Fed initiated its first rate cut of the year, though strong market expectations for easing had significantly preceded the central bank's action.

Under a declining interest rate environment, the real cost of holding gold decreases, which is the fundamental reason rate cut expectations drive gold prices higher.With interest rates falling, yields on other interest-bearing assets decline. As a non-yielding asset, gold's opportunity cost of holding also falls, making it more attractive than during periods of high interest rates. Moreover, rate cuts typically weaken the dollar, reducing the effective cost for foreign investors to purchase gold.

It is noteworthy that the Fed's decision to restart rate cuts in 2025 itself reflects intensifying market concerns about an economic recession.As Trump launched his tariff war in April, the debate over rate cuts evolved into a tug-of-war between factions prioritizing employment and those focused on inflation.

The Fed's September announcement of a 25-basis-point rate cut effectively sent two signals to the market: inflation pressures were not as severe as anticipated, yet the employment market was indeed critical. Deterioration in the labor market is a clear precursor to an economic recession. Thus, gold's rally in 2025, driven by rate cut expectations, is intrinsically linked to these growing recessionary fears.

Additionally, gold prices have been bolstered by a central bank buying spree.Global central banks are continuing a "gold rush" that began in 2022. In the first three quarters of 2025, net central bank gold purchases exceeded 850 tons, with October seeing net acquisitions of 53 tons, a 36% month-over-month increase and the largest monthly increment so far in 2025. The People's Bank of China remains a key buyer, having increased its gold holdings for 13 consecutive months through November. UBS projects total central bank gold purchases for 2025 to reach 900-950 tons.

Silver's Surge: Safe-Haven Appeal and Industrial Demand from the New Energy Revolution

Silver, a precious metal with safe-haven attributes akin to gold, has significantly outpaced its counterpart this year, driven largely by robust industrial demand amid projected severe market deficits.

According to the Silver Institute, the global silver market is projected to face a severe deficit in 2025, with a structural supply gap of approximately 95 million ounces. This marks the fifth consecutive year of shortages, primarily due to growing industrial demand.

The photovoltaic (PV) industry accounts for the largest share of this demand. Public data indicates that global silver consumption by the PV sector is projected to reach 7,560 metric tons by 2025, doubling from 2022 levels. Its share of total global silver demand is also expected to surge from 20% in 2022 to 55%. Moreover, silver demand is expanding in sectors such as new energy vehicles (NEVs), AI compute servers, and data centers. The NEV industry is forecast to consume 2,566 metric tons of silver in 2025, an increase of over 520 metric tons. Silver usage in AI compute servers and data centers is anticipated to be 30% higher than in traditional equipment.

While demand escalates, global mined silver production is set to decline to 820 million ounces in 2025, representing a cumulative 12% drop from its 2020 peak. This confluence of factors contributes to the silver shortage.

Beyond the physical shortage,tight liquidity in the spot silver market is also fueling price increases.Inventories at the London Metal Exchange (LME), the world's largest silver trading hub, have plummeted by approximately 75% from their 2019 peak. The global silver market faces strained liquidity, stemming from both low overall inventories and their highly uneven distribution. Increased inflows into silver exchange-traded funds (ETFs) and significant retail buying have further tightened market supply, consequently pushing up silver prices.

Copper's Climb: Tariff Expectations and New Energy Revolution Worsen Supply-Demand Imbalance

Copper prices have surged since 2025, repeatedly setting new historical highs, with the LME three-month copper contract touching an all-time peak of $11,771 per ton on December 8. This rally is primarily driven by a reshaping of global copper supply flows and persistent undersupply.

This year, Donald Trump’s "flip-flopping" tariff policies on copper have decisively influenced inventory movements. In February, Trump first formally proposed tariffs on copper, prompting global traders to divert shipments to the United States to preempt potentially high duties. However, in July, he reversed course, stating that tariffs would target only semi-finished copper products, excluding raw copper from the scope. More recently, Trump recommitted to reintroducing plans for copper tariffs in 2026. This series of policy shifts has intensified market expectations regarding copper tariff implementation.

From January to August 2025, U.S. refined copper imports more than doubled year-over-year, reaching 1.19 million tons. Furthermore, copper inventories in registered COMEX warehouses surged from 85,000 tons at the start of the year to nearly 400,000 tons, now accounting for half of all global exchange stockpiles. In stark contrast, available LME inventories briefly fell below the critical 100,000-ton threshold. This effectively allowed the U.S. to "siphon" global copper reserves, directly causing shortages in other markets and subsequently fueling price increases.

Concurrently, copper's supply-side fundamentals are deteriorating. In the first three quarters of 2025, output from major global copper miners fell by 106,000 tons. This decline is largely attributable to multiple mine production disruptions and, in some instances, resource depletion in certain mining areas.

Adding to the strain, copper demand has continued to climb this year, primarily fueled by the construction of AI data centers and the global energy transition. Global AI infrastructure investment is projected to exceed $500 billion in 2025, boosting copper demand by 15%. Furthermore, electric vehicle sales are expected to reach 20 million units, with each EV using 60 kg more copper than internal combustion engine vehicles.

Will Gold, Silver, and Copper Prices Boom in 2026?

2026 Gold, Silver, and Copper Price Forecasts

Opinions diverge among major financial institutions regarding the 2026 price trends for gold, silver, and copper. Bank of America Chief Investment Strategist Michael Hartnett forecasts that all commodities will mirror gold's rally in 2026.

Heraeus, a leading global precious metals refiner, indicates that gold prices are set to rise in the second half of 2026, potentially driving silver higher, propelled by ongoing central bank gold purchases, heightened market concerns over fiscal stability, and robust investment demand.

However, TD Securities holds a bearish outlook for silver, noting that the London silver market has replenished inventory losses over the past year, with over 212 million ounces of physical silver now freely available. The agency anticipates a significant replenishment of silver supply entering 2026. Furthermore, TD Securities highlights that spot silver trading volumes have dropped 65% from their October peak, suggesting that silver prices will fall early next year and struggle to rebound to current levels.

In addition, industrial demand, a key driver for silver prices, may experience a slight decline. Heraeus states that new photovoltaic installations have seen strong growth for several consecutive years; however, the growth rate in 2026 is projected to slow to approximately 1% due to potential policy changes in China.

Long-term forecasts for copper prices are generally optimistic, with expectations for an increase driven by anticipated supply shortages in the coming years. This outlook primarily considers the expanding demand from AI data centers and clean energy projects. StoneX traders assert that copper's structurally bullish fundamentals limit its downside risk.

Conversely, Goldman Sachs holds a contrary view, arguing that the recent surge in copper prices is not supported by fundamentals but rather by expectations of future market tightness. Goldman Sachs forecasts copper prices will fluctuate within the $10,000-$11,000 per ton range in 2026. The bank projects that copper supply will outpace demand by approximately 500,000 tons this year, gradually moving towards equilibrium in 2026, with a true shortage not expected to materialize until 2029.