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With the S&P 500 up 13.18% this year, you may have missed that the best investment of 2025 hasn’t been stocks, bonds, or even crypto: It’s precious metals.
The returns speak for themselves: Gold has risen 45.8% in 2025, silver has soared 52.29%, and even less-popular platinum is up 66.44%. The S&P 500 just hit its 28th new all-time high this year, while gold has hit 36 all-time highs. In fact, it just broke its record for the third straight day in a row today, putting the hot commodity on pace for its best year since 1979.
Gold’s hot streak is thanks to a number of baseline factors, including a weaker dollar, inflation concerns, and geopolitical turmoil. That last one in particular has pushed central banks around the globe to stock up on gold, while individual investors have done the same: according to Bloomberg, holdings in gold ETFs have risen at their fastest pace in over three years.
Beyond bullion
Gold is great, but it’s been outshined by its little sister: silver. In fact, silver climbed above $40 per ounce for the first time since 2011 earlier this month. The macro factors pushing gold higher have also given silver a boost, but it has another unique strength propelling it upward: Its role in making semiconductors.
And if you’re worried you missed the gold rush, palladium could be relatively undervalued. It, too, is used in jewelry and industrial products alike, a one-two punch that could drive future demand.
All roads lead back to the Fed
As traders continue pricing in more rate cuts by the end of the year, gold may have more room to run.
“This is the start of ongoing support for the gold market: when rates are lower, we see yields drop and cash is less attractive, fueling gold demand,” wrote senior market strategist at the World Gold Council Joe Cavatoni of the Fed’s first rate cut last week. “Ultimately, while markets may react in the short-term to the Fed news, the broader story for gold is its long-term value, and the strategic role it plays in investors’ portfolios in today’s macroeconomic and geopolitical environment.”
The rise of gold and silver, however, also suggests a current of fear rippling under the wave of investor enthusiasm that has washed over markets this year. There are plenty of reasons to be trepidatious about the current bull run, and the fact that investors are still buying bullion in bulk hints that they aren’t nearly as optimistic as they seem.
Maybe gold isn’t a shining example of the market’s success. Maybe it’s the canary in the coal mine.—LB