Silver Prices Smash $80 an Ounce, Then Turn Volatile as Year-End Trading Fuels Historic Rally

Monday, December 29, 2025| Dubai, UAE [posted at 2:37 PM]

Silver prices surged to unprecedented levels on Monday, as they ‌briefly broke above $80 per ounce mark for the first time in history. The rally came before sharp volatility set in as investors booked profits during thin year-end trading. Plus, the move capped an extraordinary years for the precious metal. Hence, it positions 2025 as the strongest annual performance of silver in more than four decades. 

Silver Prices hit record highs amid thin liquidity.

According to the market data, silver climbed to $79.70 per ounce on Friday before surging past $80 on Monday. March silver futures touched an intraday high of $82.67 an ounce. However, the silver prices in UAE are AED 9,545. Hence, it experienced an aggressive rally that included an 11 per cent rise on Friday. However, it is the biggest single-day gain since 2008. 

 On the other hand, prices later retreated sharply to fall as much as 8 per cent from their peak, as it snapped what could have been a 7th straight session of gains. Analysts attributed the dramatic swings to low liquidity during the holiday period, which tends to exaggerate price movements, especially in smaller markets like silver. 

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Gold also shines as safe-haven demand rises.

The rally of silver unfolded alongside record gains in gold, which climbed above $4.549 per ounce before easing to around $4,512. Both metals have benefited from rising demand for safe-haven assets as investors navigate slowing growth, geopolitical tensions, and mounting government debt in major economies. 

Precious metals are a popular hedge during periods of uncertainty for the UAE investors. Moreover, gold and silver are widely traded through regional banks, bullion dealers, and commodities exchanges.

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Rate cut expectations and a weak dollar drive momentum.

Market participants say expectations that the US Federal Reserve will cut interest rates further in 2026 remain central to the rally. Moreover, lower interest rates reduce the appeal of yield-bearing assets, like silver and gold, more attractive. 

The US dollar has hovered near multi-month lows at the same time. Hence, it will amplify gains in dollar-denominated bullion. Strength was also seen across the broader precious metals complex. However, platinum and palladium are touching record or near-record levels earlier in the session. 

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Best year for silver since 1979

Despite the pullback, silver remains up around 180 per cent in 2025. Moreover, only a few trading sessions are left in the year. That put it on track for its best annual performance since 1979, when prices surged more than 200 per cent. 

Analysts attribute the rally to a powerful combination of speculative inflows, supply deficits, and strong industrial demand. Importantly, experts told CNBC TV18 that paper trading positions are increasingly being supported by physical demand. 

Industrial demand adds structural support.

Besides investment flows, the fundamentals of silver are strong. Moreover, demand for solar energy, electric vehicles, and advanced electronics continues to rise. However, physical inventories of this metal are declining. 

Bloomberg’s Markets Wrap noted that physical shortages and rising premiums have contributed to the price spike. However, some strategies have raised concerns about bubble-like behaviour in the short term.     

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Broader commodities and markets

Besides commodities, the cooper climbed to fresh peaks. Plus, oil prices edged higher on optimism about firmer Chinese demand in 2026. Asian Equity markets were mixed but broadly positive due to strong technology stocks and confidence that global market momentum could carry into the new year.

Outlook for UAE investors

Near-term volatility is high in the silver prices. Moreover, analysts said that tight supply, central bank diversification, and resilient industrial demand underpin the long-term outlook. The metal continues to stand out as an inflation hedge and a strategic asset amid ongoing global economic uncertainty heading into 2026. 

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