In 2025 markets were shaped by three big forces: (1) a dramatic run in precious metals — gold pushed to fresh all-time highs while silver saw extreme volatility; (2) a scramble over critical and rare-earth minerals; and (3) a U.S. equity market supported by AI-driven optimism— even as debates about inflation, the U.S. dollar’s purchasing power, and tariff policy continued. Retail (average investor) and high-net-worth (HNW) investor behaviors diverged, and central banks walked a careful line as growth cooled late in the year.
Gold: A Flight to Safety
Gold moved sharply higher, reflecting geopolitical uncertainty, safe‑haven interest, and expectations for future monetary easing.
2025 saw gold reach successive all-time highs and hit notable milestones in the autumn. For many retail investors, gold behaved the way many expect a “store of value” to behave: it went up when worries about growth, currency value, or markets rose. ¹
It is important to understand that gold is often called a safe haven because it is a physical commodity rather than a claim on a company's earnings. Unlike a stock or corporate bond, gold cannot declare bankruptcy, default on debts, or "go out of business." However, "safe" does not mean "stable."Being a safe haven does not immunize gold from price fluctuations. Its value is driven by supply and demand, interest rates, and investor sentiment. While it may not default, an investment in gold can still lose value if the market price drops.
Silver: Volatile but Strong
Silver delivered larger swings than gold. Industrial demand and supply tightness pushed prices higher, but with greater volatility.
Silver’s 2025 performance was more volatile than gold’s and, by some measures, more dramatic. Silver rallied strongly — in many markets posting substantial gains from earlier in the year — driven not only by safe-haven flows but also by tight physical supply and rising industrial demand (especially solar panels and electrical uses). That dual role (precious metal + industrial metal) can make silver swing more violently than gold.²
Rare Earths and Critical Minerals
Global competition and supply‑chain concentration drove a boom in critical‑mineral attention. Western nations pursued diversification.
2025 accelerated the debate over critical minerals — the rare-earth elements used in magnets, EV motors, defense systems and electronics. China continues to dominate processing and production for many of these minerals, though companies like MP Materials and 2025 developments (including export controls and trade tensions) pushed Western governments and firms to try to diversify supply chains. Building new mines, processing capacity and alternative supply lines is capital-intensive and slow, which has supported higher prices and investment interest in the sector. This supply-demand dynamic continues to be a key area of focus for our investment committee.³
Exposure to rare-earth plays can be a long-term, higher-risk investment — policy decisions and new supply projects are likely to determine winners and losers over several years.
Tariffs and the Economy
Tariffs remained politically prominent in 2025, but broad GDP effects were smaller than the headlines often suggested. Empirical work and central-bank research show tariffs raise costs for some firms and consumers and can disrupt supply chains, but the macroeconomic impact is often more nuanced: some estimates show modest GDP effects, while others point to sectoral pain and higher prices for consumers in the short run. In 2025, tariffs helped push some companies to accelerate reshoring or inventory changes.⁴
Stocks and the AI Boom
Equity markets in 2025 remained resilient. A powerful narrative — that AI will lift productivity and corporate profits — helped sustain valuations in major markets. That optimism supported technology and large-cap names and, in turn, buoyed broader indices even as other parts of the economy showed signs of strain. ⁵
However, major research organizations and policymakers flagged that AI optimism may already be priced into markets, creating a material downside risk if corporate earnings or adoption disappoint. ⁶
Inflation and the U.S. Dollar
Inflation eased but currency‑devaluation concerns increased. A weaker dollar affected commodities and global capital flows.
Inflation remained a live topic in 2025. While headline rates moderated from earlier highs in the cycle, concerns about longer-term currency depreciation (currency “debasement”) rose — in part because the dollar weakened materially against other currencies during the year and because policymakers signaled a change in priorities.⁷ The U.S. dollar remains the dominant reserve currency, but discussions about “de-dollarization” picked up steam during 2025.⁸
In simpler terms, a weaker dollar can lift commodity prices (including gold), help U.S. exporters, and change the returns of foreign investments when converted back to dollars.
Behavioral Finance Trends
2025 highlighted behavioral differences between retail and high net worth (HNW) investors – we use retail investors and average investors interchangeably-. Surveys show many HNW investors continued to work with advisors, favoring a diversified and multi-asset approach allocations, while average investors chased thematic rallies and returns (e.g., AI), sometimes via ETFs or single stocks. Retail flows into ETFs and riskier assets can amplify market moves during episodes of excitement or fear. Data from 2025 surveys and reports suggest HNW investors tended to be more measured and advised,whereas pockets of retail activity were more reactive to headlines and social media trends. ⁹
Central Banks in 2025
Central banks in 2025 increasingly emphasized data-dependence. After a multi-year tightening cycle, many major central banks signaled a slower pace, with some moving toward rate cuts as inflation cooled and growth slowed. Yet central banks also faced new challenges: managing financial-stability risks from compressed yields and high equity valuations, and navigating the political economy of tariffs and fiscal policy.¹⁰ The result was a delicate balancing act — trying to support price stability without triggering market instability.
What it means for you:
The data from the KFSC Macro Regime Model indicate a potential "Reflation Attempt" regime. While the Federal Reserve has actively begun easing (Rates cut to 3.75-4.00%) (Source: FOMC), the Sticky CPI (3.3%) reading (Source: Atlanta Fed) signals that the structural battle against inflation is unresolved. Consequently, central bank policy remains the primary driver of volatility for interest rates and risk appetite. We believe that we must remain attuned to the divergence between the "Soft Landing" narrative priced into markets and the "Late Cycle" reality reflected in the economic data.
References
World Gold Council. (2025, October 13). Gold hits US$4,000/oz — trend or turning point? GoldHub.
Investopedia. (2025). Silver hits record high with 100% price increase this year, far outpacing gold.
Reuters. (2025, November 28). Conflict, drones, rare earths drive China supply chain dependence fears.
Tax Foundation. (n.d.). Trump tariffs: The economic impact of the Trump trade war. (Background on tariff effects and estimates).
Fortune. (2025, November 17). Goldman says the stock market has already priced in the AI boom.
Axios (reporting on OECD). (2025, December 2). AI bubble a “key downside risk” to U.S. economy, OECD warns.
Morgan Stanley Research. (2025, August 6). The devaluation of the U.S. dollar 2025.
Federal Reserve Board staff. (2025, July 18). The International Role of the U.S. Dollar – 2025 Edition. FEDS Notes.
The Investment Association & Opinium. (2025, September). Retail investors and ETFs: Understanding ETF investors today – who are they, what motivates them & how can we improve access?
Federal Reserve Bank of San Francisco. (2025, November 24). The economic effects of tariffs. Economic Letter.
Important Disclosures
This commentary is for informational purposes only and should not be considered a recommendation to buy or sell any security or the provision of specific investment advice. The opinions and forecasts expressed are those of Keaney Financial Services Corp. as of the date of this commentary. They are subject to change at any time based on market and other conditions and may or not come to pass. The KFSC Macro Regime Model is a proprietary tool. Its analysis is based on historical data; however, it in no way guarantees future results or provides a guarantee against loss. Past performance is not indicative of future results.
Investing in commodities involves increased risks, such as political, economic, and currency instability, and rapid fluctuations, which can lead to significant volatility in an investor's holdings. Commodities may not be suitable for all investors. All investing involves risk, including the possible loss of principal. Although important, asset allocation, risk management, and diversification strategies do not guarantee generating profits or shielding against losses. Please consult with your financial advisor to determine if the strategies discussed are suitable for your personal financial situation. Consult your qualified financial, legal, or tax advisor before making investment decisions.
Research Disclosure Our research and data may include contributions from paid non-affiliated markets and macroeconomic analysts and economists. We have also incorporated multiple artificial intelligence (AI) platforms to assist us in researching, diagnosing, absorbing, analyzing, and illustrating data with greater efficiency. Because our management and strategies are data-research-driven, our goal is to utilize information that we believe to be accurate, validated across multiple sources where possible. It is critical for clients to understand, however, that all data is subject to error and no amount of research or analysis can eliminate the inherent risks of investing or guarantee a specific outcome.