2025 Magical Finale: Gold Soars by 65%, U.S. Dollar Bows Down, Trump's Return Stirs Up Global Markets

Despite the fact that most investors had already predicted that the market landscape in 2025 would be different with Trump returning to the center of power in the world's largest economy, few could have foreseen the twists and turns of this market and the eventual outcome. Global stock markets rebounded strongly from the plunge triggered by the April "liberation day" tariff policy and saw a full-year increase of 21% in 2025, marking the sixth year of double-digit growth in the past seven years. However, looking at other asset classes, surprises were abound. Gold, a recognized safe haven in turbulent times, had its best year since the 1979 oil crisis with a nearly 65% increase for the full year; in contrast, the US dollar index fell by nearly 10%, oil prices dropped by about 18%, but high-risk junk bonds in the bond market saw a surge in prices. Since the leading artificial intelligence (AI) company NVIDIA Corporation (NVDA.US) became the first company in the world to surpass a market value of $5 trillion in October, the halo of the US "Big Seven" seemed to have faded, and the market value of Bitcoin also suddenly evaporated by a third. Bill Campbell, a dual-line capital fund manager, described 2025 as a "year of change and surprises". He pointed out that the significant volatility in various asset classes was closely intertwined with three disruptive issues: the trade war, GEO Group Inc's political issues, and debt problems. Campbell said, "If someone had told me in advance that Trump would return to the White House and push through radical trade policies at the current pace, I would never have predicted that valuations would be as strong or high as they are today." Due to the impact of Trump's policies, European defense industry stocks surged by 56% for the whole year. There were signals indicating that the Trump administration would reduce military protection for Europe, forcing the European region and other NATO member countries to accelerate their military expansion. This trend also helped European bank stocks achieve their best annual performance since 1997; the South Korean composite index surged by as much as 75%, Venezuela's defaulted bonds had a return rate close to 100%; and the increase in silver and platinum prices was even more eye-catching, soaring by 145% and 125% respectively. The Federal Reserve cut interest rates three times during the year, Trump openly criticized the Federal Reserve, and global debt concerns collectively impacted the bond market. The "big and beautiful" spending plan launched by the Trump administration had pushed the US 30-year Treasury yield to break 5.1% in May, reaching its highest level since 2007. Although the current yield has fallen back to 4.8%, the "term premium" in the minds of bankersthe re-expansion of the spread between long-term and short-term interest rateshas once again triggered market fears. The 30-year Japanese government bond yield also rose to a historic high. Interestingly, while global bond market volatility hit a four-year low, local-currency-denominated emerging market bonds had their best year since 2009. Companies borrowing heavily to build their AI presence have also made AI an important factor influencing the debt market. Goldman Sachs Group, Inc. estimated that the investment of large AI "super-scale companies" in 2025 would reach nearly $400 billion and projected that this number would increase to $530 billion by 2026. Not only gold shines brightly, The weakening US dollar drove the euro to a nearly 14% increase, the Swiss franc to a 14.5% increase in 2025; although the Japanese yen suffered a setback in December, its exchange rate remained stable for the whole year. Trump's restart of interactions with Russian President Putin led to a 40% surge in the Russian ruble. However, the ruble remains severely restricted by sanctions, and the title of the best currency of the year was ultimately snatched by Ghana cedia gold-producing country whose currency surged by 41% for the year. The Polish zloty, Czech koruna, and Hungarian forint saw increases between 15% and 21%; in May, the New Taiwan Dollar against the US dollar exchange rate surged by 8% in just two days; the Mexican peso and Brazilian real both achieved double-digit increases, ignoring the turmoil of the trade war. Jonny Goulden, Head of Emerging Markets Fixed Income Strategy at JPMorgan, said, "We believe this is not a short-term phenomenon. The 14-year bear market for emerging market currencies has finally bottomed out." The Argentine market also stood out. In September, Argentine President Javier Mile suffered a disastrous defeat in local elections, causing a sharp drop in the country's market; but a few weeks later, the Trump administration promised $20 billion in aid, helping Mile win a landslide victory in the national midterm elections, and the Argentine market subsequently surged. The cryptocurrency field also saw ups and downs. Trump launched his own meme coin and, as president, pardoned Binance founder Zhao Changpeng. The price of Bitcoin briefly exceeded $125,000 in October, hitting an all-time high, but then plummeted to below $88,000, with a cumulative decrease of over 6% for the year. New year, new worries The market opening of 2026 is bound to be anything but calm. Trump has actively campaigned for the midterm elections in November and is expected to soon nominate a new Federal Reserve chairmana crucial appointment for the independence of the Federal Reserve. Israel is planning to hold parliamentary elections by the end of October, and the fragile ceasefire situation in Gaza will continue to be a focus of the market; the conclusion of the Russia-Ukraine conflict remains difficult; Hungarian Prime Minister Orban will face his toughest election test since taking office in April; Colombia and Brazil will also hold key elections in May and October respectively. In addition, there are still many unknown variables in the field of AI. Matt King, founder of Satori Insights, pointed out that in terms of valuation levels, the market is entering 2026 in an "extraordinary" state; and political leaders like Trump are "looking for excuses everywhere" to try to appease voters through economic stimulus or tax policies. Matt King said, "The effects of loose monetary policy are being pushed to the limit, and this risk continues to exist." "From the rise in the term premium in the bond market, to the sudden plunge in Bitcoin, to the continuation of the gold rally, cracks have already appeared in the market's fringes."