Global markets rally as equities and precious metals gain on rate-cut expectations and easing geopolitical tensions worldwide

Global markets rallied on Monday as investors reacted to expectations of U.S. interest rate cuts and easing geopolitical tensions, marking a strong close to 2025.

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Analysts reported broad gains across Asian equities and precious metals, reflecting optimism amid a cautious global backdrop.

South Korea’s Kospi rose nearly 2% to a two-month high, recording an extraordinary annual gain of 75%, its strongest performance since 1999.

Taiwan’s benchmark index reached a record high and is set for a 25% yearly increase, while Japan’s Nikkei advanced steadily, poised for a 27% annual rise.

Precious metals were standout performers, with silver trading near $80 per ounce after a historic peak.

Gold fell slightly by around 0.5% but remains near record highs, on track for its strongest yearly performance since 1979.

Platinum and palladium experienced notable pullbacks following all-time highs.

Charu Chanana, chief investment strategist at Saxo, said the rally reflected a combination of factors. “Lower interest rates reduce the opportunity cost of holding non-yielding assets, while geopolitical uncertainty has strengthened demand for hard assets,” Chanana explained.

She added that supply constraints have further amplified market momentum.

Geopolitical developments provided additional support for safe-haven assets. Investors monitored the conflict in Ukraine following discussions between U.S. President Donald Trump and Ukrainian President Volodymyr Zelenskiy.

In Asia, China conducted large-scale military exercises near Taiwan, prompting the island to reaffirm its commitment to defending democracy.

Currency markets echoed the optimism, with the Japanese yen firming modestly and the U.S. dollar hovering near its lowest level in almost three months, set for a 9.5% yearly decline.

Analysts cited expectations of Fed easing and the potential for a more dovish policy stance in 2026 as key drivers.

Despite the upbeat close to the year, experts cautioned that the sharp rise in precious metals, particularly silver, may increase near-term volatility.

Long-term investors, however, are likely to view any pullbacks as opportunities to rebuild exposure.

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As 2026 approaches, market participants remain positioned between policy-driven optimism and lingering global uncertainties, setting the stage for a potentially volatile yet opportunity-rich start to the year.