By Mike Dolan
LONDON, Dec 23 (Reuters) - Precious metals were the clear winner in 2025, while pretty much all other traditional “safe haven” investments underperformed. That’s remarkable in a year marked by turbulence, conflict, and rumbling artificial intelligence bubble fears. Economies ran hot, politicians pushed for easy money, recession fears faded, an AI frenzy gripped markets, and geopolitical tensions rose, together shaping this year’s market landscape. Precious metals outpaced almost everything else. Silver (XAG=) and platinum (XPT=) more than doubled, and gold (XAU=) rose over 60%, its biggest jump since the 1979 oil crisis. That performance trounced the roughly 20% gains in global equity indexes. Whether gold, silver, and platinum are caught in a speculative bubble of their own is still an open question. But their strength is bolstered by strong central bank demand and their role as key inputs in the broader tech build-out.
Wider commodity indexes flubbed this year, however, drowned by a swelling oil glut. Despite several tense moments in the Middle East during 2025, and the associated fears of crude jumping to $100 a barrel, crude prices (LCOc1) actually fell 20% year-on-year and now sit at almost half that level. If you were worried about global conflict, the best place to put your money was not in traditional defensive sectors like utilities and consumer staples, but in the defense sector itself. U.S. aerospace and defense stocks clocked gains of 36% in 2025, while European counterparts jumped 55% and Germany and the continent re-armed.
<h3>LAGGING BONDS AND DEFENSIVES</h3>
Most other traditional buffers and safety plays were dead weights on portfolios this year rather than protection. Even crypto tokens like bitcoin - touted by some as “digital gold” - are ending the year in the red.
It was also a poor year for bonds. Global “risk-free” government bond indexes lost about 1% in dollar terms, while clocking just over 6% on a total return basis. Broader global bond benchmarks such as the Bloomberg Multiverse, which includes government, supra-national, agency and corporate debt, did little better, with price gains of about 1% and total returns near 7%.
That’s less than half the rise in MSCI’s all-country stock index, which is on track for its best year since before the pandemic in 2019.
Within equities, going defensive wasn’t a winning strategy. The overall S&amp;P 500 (.SPX) , flattered by tech megacaps and the AI theme, notched annual gains of 15%, as a strong U.S. economic rebound and falling interest rates in the second half of 2025 lifted most Wall Street boats. But S&amp;P 500 “growth” stocks jumped 20%, more than double the gains of “value” stocks. The S&amp;P 500’s total return was also 5 percentage points more than the equal-weighted cut of the index. While utilities, healthcare and financials had a decent year with more than 10% gains, they all trailed the main index. Consumer staples managed only about 2%, bringing up the rear. Finally, the Dow Industrials (.DJI) blue chips also underperformed both the S&amp;P 500 and the Nasdaq (.IXIC) .
SAFETY LAST? Among currencies, Japan’s yen (JPY=) and Switzerland’s franc (CHF=) are usually viewed as safety plays - but one of them also disappointed by year-end.
The dollar’s (USD=) slide in the first half of 2025 initially drove both the yen and Swiss franc higher, but the Japanese currency subsequently surrendered all its gains. A further Bank of Japan rate hike failed to help as investors fretted about fresh fiscal stimulus and were unsettled in domestic bond markets by the arrival of new Prime Minister Sanae Takaichi.
In real effective terms against Japan’s main trading partners, the yen fell about 4% over the year.
The franc, however, held on to its early gains and, along with gold and silver, was one of the few havens to make good in 2025.
But if you went into the year viewing the dollar as a haven in times of geopolitical stress, you had to think again.
The DXY dollar index fell 12% during some of the year’s most turbulent months, and stayed weak through multiple flashpoints in the Middle East, eastern Europe and even the Caribbean. Another strategy for investors wary of market disruptions would have been to buy options-related volatility indexes to profit from wild gyrations in stocks and bonds.
But these parachutes never really opened either in 2025. Despite big swings in the spring, the S&amp;P 500’s VIX (.VIX) “fear index” of one-month implied volatility is ending the year two points below where it started. The Treasury market equivalent, the MOVE index, is less than two-thirds its opening level and below half its April peak. The main currency market ‘vol’ gauges are lower as well. It simply didn’t really pay to be too cautious this year.
Doubles or quits for 2026?
The opinions expressed here are those of the author, a columnist for Reuters. – Enjoying this column? Check out Reuters Open Interest (ROI), your essential new source for global financial commentary. Follow ROI on LinkedIn. Plus, sign up for my weekday newsletter, Morning Bid U.S.
Precious indeed - gold, silver and platinum boom
<img src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4pPxu3Y?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="949" height="709" original-src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4pPxu3Y"/>
Defense, rather than defensive investment, wins out
<img src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4j9Q4Bg?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="950" height="713" original-src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4j9Q4Bg"/>
Big crypto tokens underwhelm
<img src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4apMTTD?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="949" height="714" original-src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4apMTTD"/>
“Safe” government bonds fall flat
<img src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/45goZ9C?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="951" height="712" original-src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/45goZ9C"/>
Defensive stock sectors underperform on Wall St
<img src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/3Y6qHXn?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="950" height="709" original-src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/3Y6qHXn"/>
No ‘safety’ in either dollar or yen
<img src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4pKGO90?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="952" height="711" original-src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4pKGO90"/>
No joy in buying volatility in 2025
<img src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4p6rpz0?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" alt="" width="952" height="713" original-src="https://imageproxy.pbkrs.com/https://tmsnrt.rs/4p6rpz0"/>
(by Mike Dolan; Editing by Marguerita Choy)

COST

Precious metals, especially silver, platinum, and gold, were the top-performing investments in 2025, significantly outpacing traditional safe havens and global equity indexes. U.S. and European defense stocks also saw substantial gains. In contrast, bonds, utilities, consumer staples, and cryptocurrencies underperformed. The Japanese yen fell, while the Swiss franc held its value. The dollar weakened, and volatility indexes did not provide the expected protection. Overall, cautious investment strategies did not pay off in 2025.

ROI-Guns and gold win in 2025, but other 'safety' trades bomb: Mike Dolan