Year-end in markets: historic oil prices hit record annual decline while gold soars with a 46-year gain

With most markets closed for New Year holidays, trading activity was minimal last Wednesday. In this low-volume session, major assets experienced contradictory movements reflecting the trends accumulated throughout 2025.

Gold shines with its best year in nearly half a century

Precious metals led the story of 2025. Gold gained an extraordinary close to 64%, its best annual performance since 1979 (about 46 years ago). Although it closed slightly lower on Wednesday (-0.6% to $4,318.67 per ounce), the yellow metal solidified its position as a safe haven throughout the year.

Silver outperformed gold in relative terms, recording a 147% increase during the year—its all-time high. Platinum was not far behind with an advance of over 122%, also setting a record. Palladium rose more than 75%, its best result in 15 years. The last session of 2025 showed profit-taking pressure: silver fell 6.7% ($71.36), platinum retreated 8.7% ($2,006.95).

Analysts attribute this extraordinary performance to multiple factors: successive Federal Reserve rate cuts, persistent geopolitical tensions, ongoing central bank acquisitions, and significant flows into specialized ETFs. In the case of silver, structural supply shortages, historic minimum inventories, robust industrial demand, and its new classification as a critical mineral by the U.S. boosted its appreciation.

For 2026, experts consider bullish possibilities: gold could approach $5,000 per ounce, while silver aims to reach $100. However, specialists warn that short-term fluctuations will remain under pressure from profit realizations.

Oil price: historic decline and recovery prospects

In stark contrast to gold, the historic oil price experienced its sharpest decline in five years during 2025. Brent closed down 0.8% at $60.85 per barrel; WTI lost 0.9% to $57.42. Yearly, both benchmarks accumulated declines close to 20%, the largest contraction since 2020.

This weakness is surprising given the geopolitical risks affecting key producers, sanctions imposed, and volatility in trade policies. The underlying reality is the persistent global oversupply that continued to pressure prices. Brent has now fallen for three consecutive years, marking its longest annual cycle on record.

U.S. shale producers strengthened resilience through hedges at high prices, stabilizing supply. Recent data from the U.S. Energy Information Administration show record oil production in October and unexpectedly strong increases in gasoline and distillate inventories, confirming weak demand combined with abundant crude.

Looking ahead to 2026, financial institutions forecast that oil prices could continue to decline during the first quarter. Subsequently, as supply expansion moderates, a gradual recovery is expected, approaching $60 per barrel in the second half. The market will remain attentive to the global supply-demand balance, OPEC+ decisions, and evolving geopolitical risks.

U.S. stock markets: year-end correction does not overshadow robust gains

Major stock indices closed Wednesday with modest declines. The Dow Jones fell 0.63%, the S&P 500 lost 0.74%, and the Nasdaq dropped 0.76%. Nonetheless, these corrections reflect normal profit-taking at the end of the fiscal year.

Year-to-date, all three indices posted double-digit gains, extending their bullish streak to a third consecutive year. Significant volatility characterized 2025, mainly driven by uncertainty regarding potential tariffs and investor enthusiasm for artificial intelligence.

Nvidia, a chip manufacturer, led the tech sector with a 39% annual increase, becoming the first publicly traded company globally to surpass a $5 trillion market capitalization. The communication services sector experienced the best performance, driven by Alphabet which gained 65%. Other winning sectors showed broader opportunities according to observers.

Within the year-end pressure, energy and technology led sector declines. Market professionals emphasize that this correction is a normal fluctuation without affecting the optimistic outlook for 2026. Opportunities are expected to expand from tech conglomerates into other sectors and regions.

Nike made a contrarian move, gaining 4% after its CEO bought shares worth one million dollars.

Currencies: dollar weakened but rebounds at close

The dollar index rose 0.27% to 98.50 on Wednesday, driven by stronger-than-expected U.S. employment data. Initial unemployment claims fell to 199,000, below expectations of 220,000 and the lowest monthly figure of 2025.

However, this rebound does not offset the dollar’s annual weakness, which registered a decline of over 9%, its largest depreciation since 2017. Factors include the Federal Reserve rate cut cycle, U.S. fiscal concerns, and trade policy uncertainties.

In contrast, the euro appreciated over 13%, the British pound gained 7%, the Swiss franc advanced 14%, and the Swedish krona increased 20% against the greenback.

The market expects potential rate cuts of 50 basis points during 2026, although recent authorities adopt caution regarding further easing. Analysts note that if the labor market continues to improve, the Fed could keep rates unchanged longer than expected.

The Bank of Japan increased rates twice during 2025; the yen closed virtually unchanged at 156.96 against the dollar on Wednesday, with the market vigilant for potential Japanese intervention.

Looking ahead to 2026, most anticipate continued dollar weakness, although some segments believe the bearish cycle may be nearing its end.

Global outlook and domestic developments

U.S. migration restrictions took effect on January 1 for citizens of Burkina Faso, Laos, Mali, Niger, Sierra Leone, South Sudan, and Syria. Partial restrictions also apply to Venezuela and Cuba according to Customs and Border Protection guidelines.

U.S. pressure impacted Venezuelan production: crude in the Orinoco Belt fell to 498,131 barrels per day (down 25% in two weeks), facing marine export limitations and land threats. With storage at capacity, the state company began shutting wells.

Bulgaria officially joined the eurozone on January 1, adopting the euro as its official currency after more than a decade as a key political goal.

On the domestic Chinese front, the space industry set a record with over 90 launches during 2025—a historic milestone including 73 by the China Aerospace Science and Technology Corporation. Long March rockets completed 69 missions while Jielong-3 conducted 4, dispatching over 300 objects into space compared to 190 in 2024, averaging a launch every five days.

The second nuclear unit “Hualong One” in Zhangzhou began commercial operations on January 1, completing the first phase of the world’s largest nuclear base of this technology. It will supply approximately 20,000 million kWh of clean energy annually, equivalent to reducing 16 million tons of CO2 emissions.

China completed its first 50 billion cubic meters natural gas zone in the southwest, with annual production of 50 billion cubic meters and oil equivalent exceeding 40 million tons—historic highs, marking progress toward the national target of 100 billion in Sichuan-Chongqing.