If 2025 had a single financial theme, it was the absolute dominance of precious metals. New data from Morningstar Direct reveals that every single one of the top 10 performing funds in the UK this year was tied to gold, silver, or mining stocks. Leading the pack, the Franklin Gold and Precious Metals Fund delivered a staggering 184.33% return, followed closely by several other specialized funds that all cleared the 150% mark.
The explosive growth was driven by gold prices surging 60% to surpass $4,300 per troy ounce, while silver climbed above $60 per ounce in December. Experts point to a "perfect storm" of four factors:
While equity markets remained strong globally, they couldn't compete with the concentrated gains of metals. Analysts from AJ Bell and FundCalibre noted that while lower interest rates traditionally support gold, the asset remains volatile and prone to sharp corrections after long rallies.
The "precious metal strategy" wasn't just a UK phenomenon; it dominated the top 10 lists across all of Europe. Investors increasingly view bullion as a necessary hedge against rising Western public debt and financial uncertainty.
However, the year wasn't kind to everyone:
Despite the record-breaking returns, the Bank for International Settlements (BIS) has issued a stern warning. The organization flagged both gold and US stocks for showing classic "bubble" characteristics driven by retail exuberance.
The BIS noted that this is the first time in 50 years that gold and equities have entered "explosive phases" simultaneously. Historically, such periods of extreme exuberance end with a "sharp and swift correction," suggesting that the gold rush of 2025 may be nearing a volatile turning point.
December 2025, Cryptoniteuae