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Gold, silver, and platinum have surged to fresh record highs heading into the year-end holiday period, drawing strong attention across global commodity markets. However, UBS is urging investors to exercise caution, warning that the rapid price acceleration is occurring amid thin liquidity and unclear fundamental drivers.
According to UBS analyst Joni Teves, precious metals have risen sharply in recent weeks, with platinum posting gains of nearly 40% in December alone and palladium climbing about 34%. Gold and silver have also benefited from renewed momentum, supported by a weaker U.S. dollar, tightening supply conditions in silver and platinum group metals, and generally positive risk sentiment across commodities.
Despite these supportive factors, UBS believes the magnitude and speed of the rally appear excessive. The bank described the move as “somewhat unhinged,” noting that it is difficult to identify a single catalyst strong enough to justify the scale of recent gains. While macroeconomic and geopolitical factors have played a role, UBS argues they are not fully convincing explanations for prices reaching new record levels in such a short timeframe.
Platinum’s surge has been linked to strong ETF inflows, tightening forward markets, and elevated trading volumes in Guangzhou, highlighting robust speculative and investment demand. Silver, meanwhile, has been buoyed by rising copper prices and has moved into what UBS describes as “uncharted territory,” further amplifying volatility. Gold has also received additional support from recent geopolitical developments, reinforcing its role as a safe-haven asset during periods of uncertainty.
However, UBS emphasized that short-term risks are increasing. With prices at record highs, the likelihood of profit-taking by short-term traders has risen significantly. The bank also warned that thin year-end liquidity is likely exaggerating price movements, making near-term signals harder to interpret and potentially increasing volatility.
Despite its cautious near-term outlook, UBS maintains a bullish stance on precious metals through 2026, citing considerable upside risks to its long-term forecasts. For now, though, the bank prefers to stay on the sidelines until clearer drivers emerge and market conditions stabilize.
