Precious metals have been on a heated pre-holiday run. Why this strategist is calling that 'unhinged.'

By Jules Rimmer

Thin liquidity and year-end factors are amplifying record-breaking moves, says UBS' Joni Teves

White industrial metals and copper have been catching up rapidly with gold's record-setting year

This year has been a banner one for precious metals, with the buying frenzy reaching a crescendo during December, but one strategist is warning of rising risks for investors.

"The rally feels somewhat unhinged, likely surprising even the most bullish market participants with the speed and magnitude of the move," Joni Teves, strategist at UBS told clients in a note on Wednesday. "It is difficult to pinpoint a precise trigger that is convincing enough to explain the extent of the rally across precious metals, although a weaker dollar helps."

The strategist notes that December gains for palladium (PA00) - the most active futures contract is up 28% - still lag a 44% return for platinum (PL00). Silver's (SI00) 24% spurt has left gold (GC00) looking mildly pedestrian with just single-digit gains.

Her explanation? Thin liquidity, technicals and year-end factors mean that "the trend tends to be a friend." While Teves is staying bullish on precious metals for 2026 and sees "considerable upside risks" to their forecasts, the lack of clarity surrounding recent drivers, and the extent of the rally, is pushing her to the sidelines for now.

By now, the case for precious metals has been well-established and rehearsed, and of late has spilled over into copper (HG00). Prices of the latter exceeded $12,000 per metric ton for the first time on the London Metal Exchange on Tuesday.

Many precious metals, especially silver and copper, are facing a supply deficit, with a weak dollar DXY a strong propellant for commodity prices in general. As well, the debasement trade - a loss of faith in fiat currencies owing to unsustainable government deficits and fears of runaway inflation - has been a persistent theme in 2025, and geopolitical turbulence has created demand for safe-haven assets.

Rally across equities and commodities and a weaker USD are supportive

Teves speculates that given gold's laggard status in December, it may be a case of the more industrial white metals playing catch up. Moreover, as exchange-traded funds investing in gold and platinum group metals record inflows, they are forced to go out and buy the underlying commodity, creating a virtuous circle.

Platinum and palladium ETFs see inflows and this, in turn, forces those funds to buy the underlying.

Given the spiraling prices, Teves reckons the risk of profit-taking from short-term players must be very high and she prefers not to read too much into the moves for now, during the very last few trading sessions of the year.

-Jules Rimmer

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12-24-25 1002ET