Gold and silver rallied in the days leading up to Christmas, giving precious metals investors yet another gift in 2025.

Gold’s move to almost $4,500 (£3,330) an ounce (oz) came from continued Chinese central bank and retail buying, alongside a weaker dollar. Copper also hit a new all-time high as traders stayed at their desks during the run-up to 25 December, climbing to almost $12,000 a tonne. 

But there were also surprise winners in 2025, where prices surged due to government action or worries over future supplies.

This included cobalt, after the Democratic Republic of Congo suspended exports; tungsten, driven up because of its use in military equipment and Chinese dominance in the market; and platinum group metals, pushed up by investment buying and declining mine output.

Looking ahead, several analysts think lithium will climb further next year, after gaining some price momentum in the last months of 2025. The metal has been in oversupply for years after a rush of investment early in the electric vehicle (EV) boom.

This cycle has happened several times in the past decade. The most recent bull run was 2022, when the lithium carbonate price hit $80,000 a tonne.

This year, the low was $8,300 a tonne in June, before a final-quarter rebound saw it rise to $13,350 a tonne, as per FactSet.

Lithium prices are volatile because of the abundant reserves in South America and Australia, with mines quick to reach production (in Australia particularly). Several major operations are currently suspended due to low prices.

The principal demand focus has been EVs, but lower growth than expected a few years ago has hit the market. EV sales hit 18.5mn globally in the year to November, according to energy consultancy Rho Motion. This compares with 6.6mn in 2021, and still represented a 21 per cent increase on the same period in 2024. 

But the 2025 enthusiasm for lithium came from stationary energy storage, often used alongside renewables to ensure consistency of electricity supply. UBS analysts said this could be a “game changer” for lithium, sending up demand significantly within a few years.

This has sent the bank’s price forecast for lithium carbonate for next year up from $11,000 a tonne to $16,500. 

The rally in recent months emerged because of a shift in stationary storage forecasts. In September, the Chinese government said it would double “new energy storage” capacity to 180 gigawatts (GW) within two years. This “represents a substantial boost to market forecasts”, said BMO, which also highlighted the $35bn in spending pledged alongside the goal.

Analysts there said lithium demand for stationary storage climbed 40 per cent in 2025, to around 260,000 tonnes, and should climb again to almost 300,000 tonnes in 2026. This is less sharp year-on-year growth, but would still be enough to help prices.

Panmure Liberum put lithium in its top three gainers for 2026, just behind natural gas and thermal coal. Looking further ahead, the broker’s top three for the next five years are Brent crude, cobalt and lithium, with gains of around 50 per cent for the battery metals and 30 per cent for oil. 

Bernstein thinks it will take a while for lithium to really get going. “An inflection is coming [a year faster than we previously thought] and our 2028 and 2029 estimates are much higher than consensus as we see potential deficit due to potentially higher demand for [energy storage] battery, and medium- and heavy-duty vehicle battery,” the US bank’s analysts said.

That translates to a price forecast of $20,000 a tonne in 2028, although Bernstein also thinks prices for the next two years will be flat. 

London lithium names should ultimately benefit, although given most are developers, not producers, this will be sentiment rather than profit-driven. 

What else?

Top of the tree for Panmure Liberum for 2026 is thermal coal, because it thinks China will curb local production and raise imports. Thermal coal, used in power stations, has largely traded around $100 a tonne on flat demand in recent years.

Bullish observers see a shift in pricing coming from supply: investors are unwilling to put up cash for new projects, and so it will get more and more difficult to feed coal power plants. 

But there is a race between utilities switching to lower-emission technologies such as gas and renewables and supply dropping off. In the short term, UBS painted the opposite picture to Panmure.

“Thermal coal is trading at [around] $110 a tonne and remains above support levels; we expect seaborne prices to be rangebound in 2026 with China domestic supply to recover and Brent/gas prices expected to remain soft,” they said. 

Another common pick for 2026 is cobalt. “We have revised our cobalt forecast upwards due to delays in DR Congo exports under the new quota regime, which combined with a three-month transit time to China, is expected to keep the Chinese market tight and prices elevated in the first half of 2026,” said analysts at BMO.

They also backed copper and gold for further gains, and said volatility in artificial intelligence (AI)-linked equities could be good for metals buyers: “We think an AI bubble pop could represent a strong buying opportunity for some commodities, assuming no major wider economic turmoil.” These would be copper, aluminium and uranium.

Ministers lift inheritance tax cap for family businesses 

Family farms and businesses worth up to £2.5mn will be able to be passed on tax-free after the government softened controversial inheritance tax (IHT) reforms following months of protests and pressure from farming groups and MPs. 

The original plans, set out in chancellor Rachel Reeves’ first Autumn Budget in 2024, would have limited full IHT relief to the first £1mn of qualifying agricultural or business property from April 2026.

Anything above that would face an effective tax bill of around 20 per cent, raising concerns that the changes would make it more difficult to pass farms on to the next generation. The proposals were quickly dubbed a ‘family farm tax’ by critics and sparked protests across the country.

In a statement published just before Christmas, the Department for Environment, Food and Rural Affairs said the threshold would be raised from £1mn to £2.5mn when the tax changes come into force in April. 

Ministers said they had “listened to concerns of the farming community and businesses about the reforms”. For married couples and civil partners, farm estates of up to £5mn can now be passed on without any IHT to pay, as they can combine two allowances of £2.5mn. 

Raising the threshold means fewer farms will face inheritance tax bills. According to official figures, the number of estates affected next year will fall from 375 to 186. VM

Harbour adds US base through $3.2bn deal

Harbour Energy (HBR) closed the year with another significant deal, this time a $3.2bn (£2.4bn) cash-and-shares acquisition that will take it into the Gulf of Mexico. The purchase of LLOG, a privately held US company producing around 34,000 barrels of oil equivalent per day (boepd), marks Harbour’s first entry into the US.

Its shares fell 4 per cent on the news, which was accompanied by a new dividend plan that allows more flexible payouts instead of the current flat $455mn distribution policy, as well as a $500mn share issue. 

LLOG put itself up for sale after the death of the company’s founder, Gerald Boelte, last year. Harbour chief executive Linda Cook said part of the deal involved retaining much of the LLOG team, given that her company has no US office at the moment. The current LLOG owners will become 11 per cent shareholders in Harbour. 

“The transaction positions us as a leading player in a region with well-established infrastructure, a supportive fiscal and regulatory environment and opportunities for additional growth,” said Cook. 

While current LLOG production is less than 10 per cent of Harbour’s 2025 average output, the deal price is largely in view of an expected doubling in production by 2028. This will require significant investment, however. 

“For LLOG, the transaction allows its private owners to achieve a clean exit in line [with] consensus expectations ahead of another bout of investment,” said SP Angel analyst David Mirzai. This is expected to be around $300mn a year until the end of the decade, compared with the total $2.4bn capital investment forecast for 2025, according to FactSet. 

The LLOG acquisition follows the $170mn purchase of North Sea assets from Waldorf International, which included significant tax losses as well as large stakes in the Catcher and Kraken fields. 

Cook said the Waldorf cash flow benefits, along with the $215mn sale of Indonesian assets, would “help fund our strategic entry into the deepwater Gulf through LLOG”, adding that “these three transactions are expected to materially increase our free cash flow between 2026 and 2030”. 

Harbour is funding the cash element of the deal partly through $2bn in new debt. Net debt soared through the Wintershall DEA deal that completed last year, and analysts see this figure sitting around $5bn for the next three years. AH 

BP sells most of Castrol 

One of the key planks of former BP (BP.) chief executive Murray Auchincloss’s 2025 strategy shift was the sale of Castrol to cut the energy giant’s debt. A buyer willing to hit BP’s valuation target has only emerged for 65 per cent of the lubricants business, however, with US private equity firm Stonepeak paying around $6bn for the stake. 

BP said the deal would provide “exposure to Castrol’s growth plan over the coming years, which builds on a strong track record of nine quarters of consecutive year-on-year earnings growth”. 

The company has a goal of hitting $14bn-$18bn in net debt by the end of 2027. This will mostly be through divestments, as it has also committed to spending big on new developments and holding on to share buybacks. 

The new chair, Albert Manifold, has already hired a new chief executive – Woodside Energy (AU:WDS) boss Meg O’Neill. Manifold has also reviewed Auchincloss’s reset strategy, announced in February, as well as the company’s portfolio. 

RBC Capital Markets analyst Biraj Borkhataria said selling upstream developments would have been a better long-term option for BP, as the Castrol sale means losing a “highly cash generative, low volatility and low capital intensity asset”. 

Maurizio Carulli, an analyst at Quilter Cheviot, said the sale was “a positive step forward for BP, reinforcing its ongoing ‘strategy reset’ and the aim to reduce its net debt and refocus its downstream business”. AH

Whitbread strategy called into question

Premier Inn owner Whitbread (WTB) has come under renewed pressure after US activist investor Corvex Management disclosed a 6 per cent stake in the FTSE 100 company and penned an open letter urging a review of its strategy.

The New York-based fund, which is now the group’s second-biggest single shareholder behind BlackRock (US:BLK), said the review should assess whether Whitbread’s five-year £3.5bn investment plan makes the best use of capital. 

Whitbread’s share price has fallen by almost a fifth over the past three months. In a statement, Corvex said the current market price “reflects not only a discount to the company’s fundamental value, but a discount to the value of the company’s fully owned and operated UK freehold hotel portfolio”.

The hospitality group’s property portfolio is valued at £5.5bn-£6.4bn, and management’s pursuit of a sale-and-leaseback model has proved contentious. Although the board expects to deliver £250mn-£300mn in gains from disposals for the full year, it means the company could be in for higher rental costs in the future.

Analysts at Citi blame weak sentiment on “investor concerns over the potential for an increase in UK costs”. For mid-market operators such as Whitbread, whose margins have already been squeezed by higher wage bills and rising food prices this year, just a small cost increase could put earnings under pressure.

Matters were not helped by the changes to business rates outlined in November’s Budget, which the board expects to cost £40mn-£50mn from FY2027. This compounded the impact of flat UK accommodation sales at Premier Inn, announced at the group’s interim results in October. 

In response to Corvex’s letter, a spokesperson for Whitbread said: “We run our business for the long term but remain flexible, and as stated in our announcement on 28 November, we are exploring various options to further drive profits, margins and returns in light of the impact of measures in the UK Budget.”

Corvex said it will seek a seat on Whitbread’s board as part of its campaign. EW

Rank Group falls prey to payment fraud

Rank Group (RNK) said its Spanish businesses, Enracha and Yo, had lost €7.1mn (£6.2mn) after falling victim to payment fraud. The casino operator said law enforcement had opened an investigation while it carries out its own internal probe with the help of an external law firm.

Peel Hunt analyst Ivor Jones believes it is unlikely that the group will recover any of the funds that were incorrectly transferred. “The group is in a financial position to absorb the cost and continue with its plans,” he said, adding the fraud is “unwelcome but of modest impact”.

As such, the broker has not changed its forecasts for the company, aside from adjusting its net cash expectations down by £6.2mn. Given the one-off nature of the incident, the fraud is expected to be treated as a separately disclosed item in Rank’s accounting.

The company said no material payments would be made without the approval of the chief financial officer while the internal investigation is ongoing as the group looks at ways to tighten controls further.

A challenging year for the gambling sector was capped by November’s Budget, which will raise digital gaming duties from 21 to 40 per cent in April. 

Like its peers, Rank expects the tax rises to hit profitability. The company flagged an anticipated operating profit hit of £40mn, and is currently assessing measures to mitigate the effect of higher levies.

Rank is due to report its interim results on 29 January. EW