Gold and Silver Sell-off: Buy the Dip and Let her Rip?

Gold and silver endured a bruising end to last week, with spot gold shedding 3.39% to $4,323 and spot silver cratering 8.12% to $67.90 on Friday – its sharpest single-session decline in months.

The culprit was a stronger-than-expected U.S. jobs report for May, which showed employers adding 172,000 positions while the unemployment rate held at 4.3%.

Within that, leisure and hospitality added 70,000 jobs and local government gained 55,000, offsetting a 22,000 decline in financial activities employment.

Like clockwork, Treasury yields surged to 4.55%, and the U.S. dollar index firmed, as traders abandoned near-term rate-cut expectations in favour of a higher-for-longer outlook.

For precious metals, that combination is classically toxic: elevated real yields render bonds more attractive, while increasing the opportunity cost of holding non-yielding assets such as gold and silver.

And yet that macro trigger only tells part of the story.

Silver’s decline was more than double gold’s – a divergence that reveals something important about how the market treats these two metals in moments of stress.

That is, when liquidity tightens, and risk assets sell off (Nasdaq fell 4.2% in the same session), silver gets sold as an industrial and speculative asset before it is bought as a monetary one.

That “Jekyll-and-Hyde” nature is a feature of silver that long-term investors must understand and accept: the aptly named “devil’s metal” can, and often does, outperform gold by multiples in a sustained bull market, but it’s also the metal that takes the hardest hit when the tide goes out.

Simultaneously, a modest deflation of the embedded geopolitical risk premium added further pressure to precious metals, as oil prices settled lower on Friday amid tentative optimism around a diplomatic resolution to Strait of Hormuz tensions.

While those hopes of peace were later dented on Sunday by Iran’s strike on Israel, two tailwinds ultimately reversed in a single session for gold and silver on Friday, resulting in the kind of violent, disorienting sell-off that shakes out weak hands and tests the conviction of everyone else.

Importantly, silver has since regained some ground, rising 1.3% on Monday to $68.76. Gold, on the other hand, has proved more stubborn to move to the upside, increasing by a negligible 0.19% to $4,337.

Still, the burning question for SMR readers remains: Where are gold and silver prices headed next?

On the one hand, higher rates and a stronger dollar point towards more near-term turbulence. On the other hand, any dip could be a glaring opportunity for investors to buy into weakness, before a wave of oil-shock-induced inflation propels both metals to all-time highs and beyond.

That intellectual crossroads is precisely what we’ll explore in today’s article, as we evaluate the macro forces shaping gold and silver’s destiny.

Rate Hike Anticipation Meets Seasonal Stagnation: A Bearish Summer Awaits Gold and Silver?

As we put on our bearish spectacles, our gaze immediately turns to the upcoming FOMC meeting on June 17th – the day that newly appointed Fed Chair Kevin Warsh will show his hand regarding interest rates.

Ahead of that, it’s worth noting Warsh’s intellectual foundations are monetarist to the core, shaped by Milton Friedman’s thinking during his Stanford years and best captured in the title of his 2025 Hoover Institution essay: Inflation Is a Choice.

Of course, that is not the framing of someone who views rising prices as a cyclical accident to be managed at the margin, but a man who – like us – views inflation as a direct consequence of deliberate policy failure.

Nothing in Warsh’s biography represents a better testament to that stance than March 2011, when the then Fed Chair Ben Bernanke pushed for a second round of wholly unnecessary quantitative easing.

In the wake of the GFC, Bernanke’s decision to flood the market with cheap money came at a moment when the financial system had already stabilised, and no genuine emergency remained, in Warsh’s view.

Naturally, at 40 years old with 11 years remaining on his term, Warsh resigned from one of the most prestigious positions in the U.S, unwilling to continue on a trajectory that he fundamentally opposed.

Later, Warsh branded Bernanke’s second round of QE as a “reverse Robin Hood” that widened the wealth gap by inflating asset prices – a morally-loaded critique reinforced by the act of his 2011 resignation.

In 2026, this hawkish rhetoric leads us to believe that Warsh may initially hike to combat inflation, which accelerated to 3.8% (CPI) in April as elevated oil prices continued to reverberate across the economy.

Beyond interest rate decisions and speculation over Fedspeak, there are numerous additional reasons why gold and silver could stagnate, or even mildly capitulate, this summer…

By Sound Money Report and Ted J. Butler

Source: Sound Money Report

Spotlight on Mainland CHINA Gold Market and How It Is

• 
  The strength of Chinese gold demand has been a key driver behind the growth in local mine supply, especially given that gold cannot be freely exported from China.
• The establishment of the SGE in 2002 marked a shift of China’s gold industry from being a restricted to a market oriented period, allowing gold to be traded freely in the domestic market.
• Gross gold bullion imports into mainland China in 2025 totalled 901t, highlighting their importance in international bullion trade.

Since 2013, China has been the world’s largest gold consumer, with combined physical investment, jewellery demand, and industrial offtake in 2025 totalling 869t. Jewellery consumption used to be the country’s leading segment of gold demand, accounting for 61%-75% of the total until 2023. However, on the back of the structural shift in the jewellery market (notably a move towards lighter, premium collections) and a transition from quasi-investment purchases of gold jewellery to gold bars and investment in gold accumulation plans, we saw a turnaround from mid-2024. This was ultimately driven by growing consumer awareness, amplified by social media, of the more favourable buy-sell spreads offered by bars, which typically incur lower labour costs and are exempt from consumption tax. As a result, consumers became extremely price-sensitive during strong price rallies over the past few years. In turn, the jewellery supply chain’s shift from conventional products to premium collections with higher margins, as well as the new VAT policy, reinforced this trend. This culminated with retail investment for the first time outperforming jewellery consumption in 2025.  

On the supply side, since 2007 China has been the world’s largest gold producer. This saw four consecutive years of growth, reaching 392t in 2025. Fewer safety and environmental stoppages impacting production, along with higher gold prices, underpinned the rise in gold output. To meet the country’s substantial demand for gold, China is also the world’s largest  gold bullion importer, with total imports reaching 901t in 2025.

Market Liberalisation

The history of the Chinese gold market can be divided into three broad phases: 1949-1993, the restricted period; 1994-2001, undergoing reform; and from 2002 onwards, market liberalisation, after the establishment of the Shanghai Gold Exchange - SGE. During the first phase, gold production was an essential way for the government to increase its foreign exchange reserves. The allocation of gold was therefore a typical feature of a planned economy, being tightly controlled by the government. In 1993, China began aligning its domestic gold prices with the international market. The following year, it abolished all preferential policies for gold producers and started its market-oriented price mechanism. 

From 1995 onwards, China’s foreign exchange reserves surged, surpassing US$100bn in 2000 before reaching $403bn in 2003. Consequently, the significance of gold in China’s foreign exchange reserves began to diminish. Meanwhile, increasingly affluent Chinese households and individuals began shifting their focus on gold from short-term returns on wealth to its long-term value preservation and intergenerational transfer. All these factors led to the establishment of the SGE on 30th October, 2002. This marked the point when China’s gold industry became fully market-driven, entering a new era where market forces determined prices and trading.

Initially, the SGE was mostly established as a commodity trading platform to help facilitate the transition of gold trading from the People’s Bank of China’s (PBOC’s) centralised allocation and procurement system to market-driven trading. In 2004, the SGE launched gold spot deferred products (Au (T+D)), designed for institutional investors, marking a transformation towards a specialised financial market. At the same time, the China Banking Regulatory Commission approved the four major state-owned commercial banks (Industrial and Commercial Bank of China, Agricultural Bank of China, Bank of China, and China Construction Bank) to launch gold investment services for retail investors. This new regulation, together with the launch of the Au (T+D) contract, led to a gradual increase in gold retail investment products, including minted gold bars, paper gold trading, and Gold Accumulation Plans. 

In 2008, physical gold trading accounted for only 27% of the SGE’s total trading volume, with Au (T+D) dominating at 73%. To further support institutional and retail investors demand, on 8th January 2008, gold futures contracts were launched on the Shanghai Futures Exchange (SHFE). It was arguably the establishment of these two exchanges that helped strengthen China’s role in the global gold market.

Importantly, the SGE did not immediately open to foreign participation. However, in 2008, the SGE began admitting overseas financial institutions to trade on its main board. A more significant milestone came in 2014 with the launch of the SGE International Board in the Shanghai Pilot Free Trade Zone, which has allowed overseas institutions to use offshore RMB for trading on the SGE main board. In 2016, the SGE launched the “Shanghai Gold” pricing platform, conducted twice daily at 10:15 AM and 2:15 PM (or 3:00 PM). At the time of writing, the SGE has 104 foreign membership companies.

In essence, the SGE has evolved into a gold market featuring various trading methods (including auction, inquiry, and pricing), multiple time dimensions (such as spot, deferred spot, and forward), several precious metals (gold, silver, and platinum), and a number of product types (including standard gold, gold coins, and gold derivatives). On the back of gold’s impressive price gains and a series of record high prices in 2025, trading volumes of the SGE Au(T+D) surged by 66% y/y to a five-year high of 5,826t. Meanwhile, trading volumes of gold futures on the SHFE enjoyed a 49% y/y gain to a historical high of 110,020t.

By LBMA

Source: LBMA

• 
  Morgan Stanley says gold is trading less like a haven than before.
• Silver and aluminium look stronger on supply and demand trends now.
• Copper lacks the backdrop needed to support a lasting bull move now.

Gold’s traditional role as a portfolio shelter is coming under closer scrutiny, according to Morgan Stanley, which argues the metal’s recent price action has been more mixed than investors typically expect from a classic haven.

The bank’s view comes after a volatile stretch across commodities over the past six weeks, driven by anxiety over conflict involving Iran, shifts in interest rate expectations and broader market turbulence.

Although a ceasefire was agreed on Wednesday, that has not fully restored confidence in gold’s defensive behaviour.

The metal has pulled back sharply in recent weeks after rallying to record highs earlier in 2026, with prices coming under pressure as the US dollar strengthened and investors adjusted to a more uncertain rate outlook.

For Morgan Stanley, that reversal matters because it highlights how gold has not consistently responded to geopolitical stress in the way investors might typically expect.

Instead of attracting uninterrupted haven flows, gold has at times weakened as liquidity pressures, positioning and macro factors — particularly real rates and the dollar — have taken precedence.

In that sense, Morgan Stanley’s argument is less about gold losing relevance altogether and more about the market changing the way it prices and expresses safety.

Why gold’s role is being questioned

The bank’s core point is that gold’s near-term performance appears increasingly influenced by macro forces and large institutional flows rather than a simple flight-to-safety dynamic.

Analysts say price action is being shaped by central bank demand, exchange-traded fund positioning and shifts in currency and rate expectations, rather than by a broad, instinctive rush into defensive assets.

That shift matters because it can make gold behave less like a straightforward hedge and more like an asset sensitive to liquidity conditions and portfolio rotation.

Morgan Stanley’s more cautious stance reflects this changing dynamic: gold may still offer long-term diversification benefits, but its short-term behaviour is proving less predictable as a geopolitical hedge.

In practical terms, the bank is arguing that investors should be more selective.

Gold can still serve as a store of value over time, but recent moves suggest it is no longer the clearest or most immediate expression of a defensive metals trade.

Why silver looks more compelling

Morgan Stanley is more constructive on silver, which it sees as having a stronger fundamental underpinning despite recent volatility.

Silver has retreated from its early-2026 highs, but the bank and industry data point to continued support from underlying supply-demand dynamics.

One of the main reasons is the persistence of supply deficits over several years, which has tightened the physical market even when prices have been volatile.

At the same time, industrial demand remains a key pillar, particularly from sectors such as solar and electronics, even as efficiency gains and substitution trends begin to moderate usage growth.

That does not mean silver is free from speculative swings.

Earlier surges were amplified by investor positioning, and volatility remains a feature of the market.

Even so, silver still appears to have a more tangible bullish case than gold because its outlook is supported not only by sentiment, but also by structural demand and constrained supply.

Why aluminium stands out

Aluminium is another metal where Morgan Stanley sees a clearer bullish case.

The bank’s constructive view rests largely on supply-side constraints and the high energy intensity of production, which limits how quickly output can respond to demand.

London Metal Exchange aluminium prices have remained supported in recent months, with analysts pointing to tight supply conditions even as broader macro uncertainty persists.

China’s capacity controls and the pressure of elevated power costs on smelters are central to that story.

Production disruptions in some regions and the difficulty of restarting idled capacity have reinforced the supply tightness.

Because aluminium production is closely tied to electricity availability and pricing, supply responses tend to be gradual rather than immediate.

As a result, prices may remain relatively resilient even if broader economic conditions soften.

Why Morgan Stanley is more balanced on copper

By contrast, Morgan Stanley takes a more balanced view on copper.

While the metal retains strong long-term support from electrification and energy transition trends, the bank sees a more mixed near-term backdrop shaped by demand uncertainty and evolving market dynamics.

That makes copper different from the more clearly supply-constrained aluminium story or the structurally tight silver market.

It remains a strategic metal with long-term appeal, but near-term price direction may be less straightforward.

The broader takeaway is that investors can no longer treat the metals complex as moving for the same reasons.

Gold’s short-term behaviour is becoming more macro-driven, silver is supported by tighter fundamentals, aluminium is benefiting from supply and power constraints, and copper sits between strong long-term demand and a more uncertain near-term outlook.

For portfolio managers, that means the next phase of metals investing may be less about owning a generic hedge and more about identifying where the real structural pressure points lie.

By Invezz

Source: Invezz

Hong Kong Gold Vault: China’s Bullion Power Play

As China aggressively seeks to exert greater influence on the global commodities landscape, Hong Kong is poised to become a pivotal battleground, particularly in the Gold market. Ambitious plans are underway to transform the city into a regional gold hub, but significant hurdles remain as Beijing juggles competing priorities of market dominance, resource security, and industrial control.

Hong Kong’s Golden Ambitions

Hong Kong is rolling out targeted incentives to lure gold refiners and precious metals companies, with a focus on achieving London Bullion Market Association (LBMA) certification. This move, spearheaded by InvestHK, aims to elevate Hong Kong’s status in wholesale bullion transactions. A key initiative is the collaboration with the Shanghai Gold Exchange and Shenzhen regulators to streamline trade between Hong Kong merchants and mainland refiners. These efforts extend to the development of ETF-linked products and even the exploration of tokenised gold.

The strategic importance of Hong Kong is further underscored by a recent agreement with the Shanghai Gold Exchange to establish a central gold clearing platform. This platform is designed to facilitate trade settlement and mitigate counterparty risk. The government has set an ambitious three-year goal to significantly expand gold storage capacity to over 2,000 metric tons, solidifying Hong Kong’s position as a regional gold reserve.

China’s Broader Commodities Strategy

China’s ambitions extend beyond gold, encompassing a broader strategy to secure its position in critical commodities. The National Development and Reform Commission (NDRC) is actively addressing overcapacity in heavy industries, particularly copper smelting. Concurrently, efforts are being intensified to bolster mineral exploration, build strategic reserves, and proactively secure resources from overseas.

The Quest for Pricing Power

Despite being the world’s leading gold producer and consumer, China’s influence on global gold pricing remains limited, with London and New York dominating the market. Hong Kong undersecretary for financial services and the treasury, Joseph Chan Ho-lim, has articulated a clear objective: to expand China’s market share and influence on international gold prices.

Chinese miners are leveraging Hong Kong’s exchange to Finance global acquisitions, exemplified by Zijin Gold International’s planned C$5.5 billion acquisition of Canada’s Allied Gold. The People’s Bank of China has also been steadily increasing its gold reserves for the past 15 months, reflecting a broader trend among nations seeking to safeguard their assets within their own borders, particularly in light of geopolitical uncertainties.

Strategic Priorities and Potential Pitfalls

China’s latest five-year plan highlights the importance of critical minerals such as rare earths and reaffirms its commitment to maintaining its leadership in this sector. This includes tightening export controls to safeguard its strategic advantage. The plan also anticipates significant grid expansion and investment in clean energy, which are expected to drive up demand for copper and aluminium. However, the NDRC has reiterated concerns about overcapacity, specifically in copper smelting, signalling potential regulatory interventions to manage industry growth.

Global Demand and Investment Trends

Analysts at Swiss Resource Capital highlight copper’s critical role in the renewable energy transition and electrification, making it a key focus for investors and policymakers. Gold, meanwhile, continues to attract buyers seeking a safe haven in times of economic uncertainty. China’s emphasis on industrial modernisation in its 2026-2030 planning round further underscores the importance of both metals.

Retail Appetite and Hub Aspirations

Strong retail demand for jewellery and watches in China is evident in the robust sales figures reported by China Duty Free Group during the Spring Festival break, with a 23.7% jump in sales at its cdf Sanya duty-free complex in Hainan. This trend highlights the growing consumer appetite for precious metals, further fueling China’s ambitions to establish Hong Kong as a gold trading hub.

Challenges and Uncertainties

Despite the ambitious plans, establishing a credible gold hub in Hong Kong is not without its challenges. Refineries must adhere to stringent global standards, and the market requires genuine activity and liquidity. Offshore investors are closely scrutinising China’s capital controls and the potential impact of sanctions. Moreover, the government’s pronouncements on overcapacity and stockpiles have been vague, leaving room for uncertainty and potential surprises.

In the near term, Hong Kong faces critical questions: Will refiners relocate capacity to the city, and will foreign buyers embrace Hong Kong for bulk delivery and storage? For Beijing, the central question is whether investing in infrastructure will truly translate into greater influence over global benchmark prices. The success of China’s efforts to reshape the global commodities landscape hinges on addressing these challenges and navigating the complex interplay of market forces, geopolitical considerations, and regulatory interventions.

By Adebayo Durojaiye

Source: TMAStreet

Diversification with a heart of gold

Gold has shone brightly amid geopolitical uncertainty and shifting policy dynamics, drawing investors toward its perceived safety. We see it as an appealing, strategic diversifier in today’s environment.

Gold has played a central role in commerce, diplomacy and wealth preservation for millennia. From ancient Egypt to the Roman Empire, it has been used to signify power, settle international obligations and mint high?value currency.

Across the ages and immeasurable global changes, gold has retained its role as a universally recognised store of wealth. For modern investors, it remains a constant in an increasingly complex world.

At Coutts, we have re-introduced gold into our multi-asset discretionary investments through a modest, strategic allocation. Examining the precious metal through our Anchor and Cycle investment process – which blends long-term analysis with tactical agility – we found that even a small weighting could improve long?term outcomes. It has the potential to enhance portfolio robustness and help mitigate key market risks.

Powerful diversification

Over the past year, gold has undergone a dramatic appreciation against a backdrop of chronic uncertainty. Tariffs, geopolitical tensions and elevated government debt have all weighed on confidence.

Gold rose from around $2,600 per ounce in December 2024 to more than $5,500 per ounce last month – a new all?time high. Prices then softened amid some profit taking and the prospect of a new US Federal Reserve Chair who could favour higher interest rates. Prices remain volatile, but are still elevated by historical standards.

For us, however, gold’s true value lies less in short?term movements – which are often erratic (more on that later) – and more in its powerful diversification characteristics.

Past performance should not be taken as a guide to future performance. The value of investments, and the income from them, can fall as well as rise and you may not get back what you put in. You should continue to hold cash for your short-term needs. This article should not be taken as advice.

Government bonds still best for recession risk

Gold should be viewed as part of the diversification toolkit. When it comes to hedging recession risk, we believe that high?quality government bonds remain the most effective instrument. Their relative security often makes them the warm, dry shelter investors flock to when economic storms brew overhead.

While recession is not our base case currently – our analysis shows the economy now in an expansion phase – it is prudent to be prepared should this change. Even though we don’t currently expect bonds to perform as well as equities over the coming months, we continue to hold them for this important reason.

Growth risks are not the only challenges investors face. Risks around geopolitics, inflation and fiscal sustainability are also significant – increasingly so in recent years – and we expect this to continue. This is where gold could shine as a diversifier.

Historically bonds and gold move in a different direction to equities. However, bond-equity correlations have increased in recent years due to elevated inflation and more uncertain central bank policy. Under these conditions, gold’s ‘safe haven’ status and low correlation to equities could become increasingly valuable.

Gold also has a long history of delivering positive returns during severe equity drawdowns, offering support precisely when investors need it most.

It is these characteristics – low correlations and a decent track record during periods of stress – that we examine to assess the value of any potential diversifier.

What’s next for gold?

Looking ahead, several structural tailwinds could continue to support gold.

Fiscal deficits across developed markets remain elevated. Within the G7, government debt?to?GDP ratios range from 64% in Germany to 237% in Japan, with six of the seven economies above 100%.

These dynamics raise periodic concerns about fiscal sustainability, contributing to bouts of volatility in government bonds. In such environments, investors may increasingly turn to gold as a diversifier.

A second tailwind is continued central bank buying. Since 2022, central banks have accumulated substantial quantities of gold as they seek to diversify reserves away from US dollar?denominated assets. While forecasting future purchases is difficult, we do not see this trend reversing.

Small that glitters…

Despite its ancient pedigree, gold remains a small financial market, which partly explains the price swings observed in recent months.

The World Gold Council estimates that around 219,890 tonnes of gold have been mined throughout history. But only about 90,000 tonnes are accessible to financial markets – bars, coins, exchange traded fund holdings and central bank reserves.

At an indicative price of $5,000 per ounce, this equates to a market value of roughly $14.5 trillion, compared to a global equity market of approximately $125 trillion and fixed income figure of around $145 trillion. 

Given gold’s smaller scale, even marginal changes in demand and supply can meaningfully influence price behaviour, making significant price moves more common than in other major markets.

Recent volatility illustrates this. Markets were surprised by President Donald Trump’s nomination of Kevin Warsh as US Federal Reserve Chair, as Warsh was perceived as potentially less inclined toward rate cuts than other candidates. The resulting strength in the US dollar contributed to a sell?off in gold.

This move was likely amplified by the Chicago Mercantile Exchange’s decision to raise margin requirements for gold futures – effectively increasing the collateral needed to open or maintain positions. Higher margin requirements make positions more expensive to hold and can prompt some investors to scale back or exit trades, amplifying price moves.

Strategic rather than tactical

Such episodes highlight why tuning out short?term market moves is important, but quite difficult. That is why we see gold as part of the Anchor element of our process (strategic, long term) rather than Cycle (tactical, short term).

We think modest strategic allocations could improve the robustness of portfolios or funds. But extreme, and sometimes opaque, price moves are a consequence investors must bear in exchange for improved diversification.

By Joe Aylott, Multi-Asset Strategist

Source: Coutts

Gold, Silver Stumble at the End of Best Year Since the 1970s

Gold and silver fell on the last trading day of 2025, though both remained on track for the biggest annual gain in more than four decades as a banner year for precious metals drew to a close.

Spot gold hovered around $4,320 an ounce, while silver slid toward $71. The two have seen exceptional volatility in thin post-holiday trading, plunging Monday before recovering Tuesday and dropping again Wednesday. The big swings prompted exchange operator CME Group to raise margin requirements twice.

Both metals are on track for their best year since 1979, supported by strong demand for haven assets amid mounting geopolitical risks and by interest-rate cuts by the US Federal Reserve. The so-called debasement trade — triggered by fears of inflation and swelling debt burdens in developed economies — has helped supercharge the scorching rally.

In gold, the bigger market by far, those factors spurred a rush by investors into bullion-backed exchange-traded funds, while central banks extended a years-long buying spree.

Gold is up about 63% this year. In September, it eclipsed an inflation-adjusted peak set 45 years ago — a time when US currency pressures, spiking inflation and an unfolding recession pushed prices to $850. This time around, the record run saw prices smash through $4,000 in early October.

“In my career, it’s unprecedented,” said John Reade, a market veteran and chief strategist at the World Gold Council. “Unprecedented by the number of new all-time highs, and unprecedented in the performance of gold exceeding the expectations of so many people by so much.”

Silver has notched up a gain of more than 140% during the year, driven by speculative buying but also by industrial demand. The metal is used extensively in electronics, solar panels and electric cars. In October, it soared to a record as tariff concerns drove imports into the US, tightening the London market and triggering a historic squeeze.

The new peak was then passed the following month as US rate cuts and speculative fervor drove prices higher. The rally topped out above $80 earlier this week — in part reflecting elevated buying in China.

Yet the latest move swiftly reversed, with the market closing down 9%  Monday then swinging the following two days. In response to the extreme volatility, CME Group again raised margins on precious-metal futures, meaning traders must put up more cash to keep their positions open. Some speculators may be forced to shrink or exit their trades — weighing on prices.

By Yihui Xie and Jack Ryan

Source: Yahoo

Morgan Stanley Says Gold Pullback Is a Buying Opportunity, Lifts Focus to 2026

The gold price ended the week at 4,219.53 dollars per ounce, up 1.35 percent, extending a strong run that has kept the metal well bid through late November. 

Prices have held firm after a series of volatile sessions, with last week’s moves ranging between 4,074 and 4,218 dollars, as investors continued to rotate back into precious metals.

Morgan Stanley calls gold its top pick across the commodities complex and expects the backdrop to stay supportive into 2026.

The bank points to a decisive shift in investor behaviour this year, with ETFs reversing four years of net selling and adding the largest tonnage since 2020.

It expects that demand to continue as interest rates fall, while central banks keep adding to reserves and jewellery consumption shows early signs of stabilising.

The bank says demand for real assets has also strengthened as investors reassess portfolio hedges against inflation risks and economic uncertainty.

With that backdrop in mind, Morgan Stanley views the latest dip in prices as an entry point and holds a mid-2026 forecast of 4,500 dollars per ounce.

Risks include further bouts of volatility that could divert flows to other asset classes, or any shift by central banks toward reducing reserves.

Silver is also on Morgan Stanley’s radar, with the market likely to remain in deficit and prices expected to stay close to record territory.

By Dave Taylor

Source: Exchange Rates UK

Brazil Takes Initiative to Build a Better Gold Supply Chain

In September, the Brazilian Forum for Responsible Gold was launched under the leadership of the National Mining Agency. The event was held at the Ministry of Mines and Energy in Brasilia and jointly hosted by the Brazilian National Mining Agency together with the World Gold Council and Intergovernmental Forum on Mining. The event marked the country’s commitment to leading the charge in formalizing artisanal and small-scale gold mining (ASGM), enhancing traceability, and combating illegal mining and illicit financial flows.

The Forum’s agenda was both ambitious and urgent. Discussions focused on strengthening regulatory oversight, implementing digital traceability technologies, eliminating mercury use in gold processing, and dismantling criminal networks that exploit the informal mining sector. The human and environmental toll of illegal mining was laid bare—particularly its impact on indigenous communities such as the Yanomami and Munduruku peoples, and being a major reason for deforestation together with causing devastating mercury pollution affecting the Amazon’s ecosystems and vulnerable populations. Brazil’s unique position within the Amazon Basin, which spans nine countries with porous borders, underscores the complexity of monitoring gold flows and the need for regional cooperation. In particular, in Brazil, wildcat mining on Indigenous reservations increased by an estimated 1,217% from 1985 to 2020.

Participants in the Forum included representatives from the World Gold Council, Ministry of Mines and Energy, the National Mining Agency (NMA), the Environment Agency, the Central Bank, the Federal Police, the National Mint, IBRAM (the mining industry’s leadership body which campaigns against illegal mining), civil society organizations, and the voice of small-scale miners. The Foreign Ministry’s efforts to update the Palermo Convention on Organized Crime were also highlighted, aiming to make it more effective in addressing environmental and natural-resource-based crimes. The elimination of the assumption of “good faith” in gold trading and the push for traceability back to source concessions were recognized as major steps forward in sector reform.

The Brazilian Federal Police are world leaders in the development of gold traceability technologies and have pioneered the development of a national database which catalogues gold samples from different regions in the country. This has allowed the authorities to bring prosecutions against individuals suspected of being involved in illegal mining and transporting stolen gold. The Federal Police are now looking to expand the database to include samples from neighboring countries to help tackle cross-border crime involving gold.

As Brazil positions itself at the forefront of responsible gold sourcing, the World Gold Council is committed to supporting this transformative journey. The WGC looks forward to working with Brazil to support its programmes. We call on governments, industry leaders, NGOs, and financial institutions worldwide to join this movement. Together, we can ensure that gold becomes a driver of sustainable development, economic empowerment, and environmental stewardship.

By Edward Bickham

Source: World Gold Council

JPMorgan’s Dimon says owning gold makes sense in today’s market, could go to US$10,000

JPMorgan CEO Jamie Dimon said it’s “semi-rational” to hold gold given current market conditions, noting that the metal could climb sharply in a volatile environment. Speaking at a Fortune event, he warned that asset valuations appear stretched across most markets.

JPMorgan Chase CEO Jamie Dimon said it’s now “semi-rational” for investors to hold gold, acknowledging that the metal’s appeal has strengthened amid today’s uncertain market backdrop.

Speaking at Fortune’s Most Powerful Women conference in Washington, Dimon said there is “some logic” in owning gold even after its sharp rally, though he stopped short of calling it cheap or expensive. “I’m not a gold buyer — it costs 4% to own it,” he said. “But it could easily go to $5,000 or $10,000 in environments like this. This is one of the few times in my life it’s semi-rational to have some in your portfolio.”

Dimon added that asset prices generally look elevated, warning that valuations “are kind of high across almost everything at this point,” a remark that reflects his broader caution toward risk assets despite resilient markets.

By Eamonn Sheridan

Source: investingLive

“Gold fever… Nothing can help you but the yellow stuff..”

Gold has been an absolute portfolio star this year. It’s ridden the markets rising fears on sovereign debt, inflation and political incompetency. What will drive it back down? It seems unlikely fears will lessen, especially if predictions of rising instability and stagflation prove founded.

Gold. The Yellow Metal. It’s been a rather good investment… up nearly 40% this year. But I am getting antsy. My largest PA position is Gold. It might not pay interest, but its “appreciation” has worked rather well as a hedge to the perceived risks of rising inflationary expectations, huge national debt loads, and the competency of governments to manage their solvency. Gold has made off like a bandit on the back of these mounting concerns, demonstrating its traditional role as the crisis-flight-event, safe-haven.

The Price of Gold is directly correlated to fear. The rally in Gold is a clear sign of something rotten in the global economy. And that something would appear to be debt. (Spoiler – Rule No 1 of a good mystery thriller: Make the audience think debt is the killer, to deflect and distract from the real murderer!)

The time to worry about the longevity of any long-term trade – like my gold position – is when everyone else starts commenting on it. The trick of successful trading is anticipating what the market is going to think, reading the markets fears and panic. Presently I’m highly confident in my Gold Position because the dominant fears driving markets is growing panic that global government debt is increasingly unstainable, interest rate payments are crowding out spending, and the fear policy mistakes will lead to an “inevitable” debt cataclysm. The market “commentariat” is running out of ink as it warns of multiple approaching debt crises along these themes.

But, the art of good investment is understanding the outlook.

I’ve spent a whole career in bonds. I will always consider myself to be in learner mode – but I’m pretty sure much of the current debt fears are overblown. I suspect much of it is being deliberately fanned for political reasons, attempts to paint political foes as incompetent is generating exactly the kind of fear and panic that does destabilise governments and trigger financial crises. You can read all about in in the wonderous tales of “The imminent collapse of Fiat Money”, “Buy Bitcoin as the better than Gold safe haven”, “Economy Drowning in Interest Rate Payments” articles that now fill Linked-In. Anything in the Torygraph on debt is now written to scare the horses. There was a time you had to read Zerohedge to find such sensationalist, incoherent financial mumbo-jumbo online.

The bottom line is much of the generated fear on the global bond markets is probably overplayed. But there is no point in trying to shout “Don’t Panic” to a terrified crowd already running for the lifeboats.

There may be some respite. Next week the Fed will cut interest rates, and we are likely to see a massive rally in the short-end of the US yield curve. The economic data increasingly suggests its “safe” for the Fed to ease. However, I suspect the yields on the long-end and the ‘belly of the curve” (5-15 years) will remain stubbornly high, reflecting lingering doubts on inflation and stagflation. That will have consequences in the White House.

There is a reason strong economies “own” their own currencies. It gives them financial sovereignty, and financially sovereign nations don’t go bust. They can always pay their debts. They can do so by printing more money. That has consequences – usually inflationary, and upon the value of its sovereign currency. A tumbling currency simply magnifies inflation, and too low interest rates will cause the currency to tumble. Its complex, but a broadly competent government (actually, the professionals in its treasury) will ensure its’ kept functional. (Crypto proponents will use exactly the same argument I’ve presented above to justify non-Fiat alternatives  – arguing Governments exploit Fiat to control the economy.)

The countries that do go bust, go bust because they’ve made the mistake of borrowing in someone else’s currency. For instance, perennial defaulter Argentina historically borrowed dollars but then found their peso could not buy enough dollars to repay the dollar bond without printing more pesos, causing the peso to further collapse, triggering massive inflation. Borrow, Devalue the Currency, Crisis. Repeat.

Borrowing in someone else’s currency is a problem for France – especially after the loss of another prime minister last night. It does not control the printing press for the Euro. That’s a committee within the ECB that’s politically constrained from paying the French Republics’ welfare bills with taxes paid by other EU members. The risks of a damaging bust-up within the ECB will be politically managed, but everyone is aware the Euro is a politically constructed monetary union, unbacked by anything but notional fiscal union. The solution will be some kind of fudged concocted deal to ensure France stays solvent, doesn’t destabilise the union, doesn’t go bust, but makes all kinds of commitments to scale back spending within European rules. Its messy. (I predict it will get messy, but at some point, French bonds are going to get very cheap – and that’s the point to buy!)

The UK is in a wholly different proposition. The Labour government is desperately trying to demonstrate its credentials to the bond market as a disciplined borrower by sticking rigidly to its rules about balanced budgets and the holy writ of the Office for Budget Responsibility. It resorted to the rhetoric of traditional conservative “austerity” to stem spending, but misjudged its own members. Now we have a political party in crisis as backbenchers refuse to support cuts, and the front bench are left like rabbits caught in the headlights, trapped in their own promises.

The alternative would have been much better. Before the last election Rachel Reeves was urged to engage with markets. Has she done so successfully she could have laid out plans to re-jig the UK economy with costed spending plans on infrastructure, increased defence spending, and a promise of a Royal Commission to completely overhaul and manage the costs of the NHS (before it consumes the whole economy.) A well-presented, considered plan could have met with Gilt Investors approval – allowing the Chancellor to slow tax-rises and create multiplier effects from spending in the economy. Didn’t happen, and now the UK finds itself under attack for the perceived weakness of higher 30-year rates.

But it’s the US where I am getting most concerned. Reading some of the ramblings emanating from out of the White House, like Scott Bessent’s recent rant in the WSJ – The Fed’s “Gain of Function” Monetary Policy, fill me with dread.

Bessent wants to fund US Government Spending though StableCoin funding. Oh, to own a stablecoin – that’s the way to get rich, as someone explained to Donald Trump. Tether is making enormous profits by holding US Treasuries to back its stable coin. It sells them for a dollar to folk who want to transact anonymously and keeps the 4.5% interest rate the bonds generate. And what possible risks are there to Tether? None at all – all these rumours about them not being worth a dollar in a liquidity crash, or that they are being levered – tush and nonsense… dear boy.. nothing to worry about. A dollar is a dollar – what is a tether? (What happens when the Stablecon market funds the whole US Treasury market, and the President sets the coupon on bonds at 0%?)

The reality facing the US debt market is potentially highly disruptive. At present the US government is funded by the strength of the Treasury Market. That’s based on the idea T-Bonds are as safe as gold. The strength of the US economy and its role as Global Hegemon ensured it.

That is no longer as true. Perceptions of the Treasury market are vulnerable to sentiment and facts. Sentiment towards the US is changing – and changing fast. The factual reality is also under threat – for decades every single commodity transaction was done in dollars. Profits went into banks who invested these dollars into US bonds. Now global trade is increasingly multi-lateral and denominated in other funds. That’s cutting the demand for Treasuries.

And then we have a President who demands interest rates are lower. We know how that is likely to happen – the Fed will cut rates next week. But Long-End US treasuries, even the benchmark 10-year, will stay high. The Trump-run Fed will then be told to exercise yield-curve-control, buying long bonds to pull down yields – effectively printing money to do so. The result will a repeat of the QE years – which generated the massive inflation in financial assets that Bessent referenced in his WSJ article – but also further weakness in the US dollar unless every other central bank is making similar coordinated attempts to remount QE.

Bearing in mind my key market mantra No 2: “Things are never as bad as we fear, but seldom as good as we hope”, I do think weakness in bond markets is being overplayed – but it cannot be ignored. When that pressure eases, gold will likely come off a little.  The real killer probably lurks in the corporate space. (I’ve sold all my Tech positions (except my Tesla shorts) some time ago. I’m now pretty much flat US equity, with just a few specialist investments, European defence stocks, and some China positions on the book.)

For the time being I remain in Gold – and I’m going to keep it running for now.

Out of time and back to the day job… which involves catching a train to London with my Brompton Folding Bike under my arm….

By Bill Blain

Source: The Morning Porridge

Citi raises gold forecast to $3,500/oz over next 3 months on negative US outlook

Citi raised its gold price forecast over next three months to $3,500 per ounce on Monday from $3,300, and the expected trading range to $3,300–$3,600 from $3,100–$3,500, on the belief that near-term U.S. growth and inflation outlook has deteriorated.

"U.S. growth and tariff-related inflation concerns are set to remain elevated during 2H’25, which alongside a weaker dollar, are set to drive gold moderately higher, to new all-time highs" the bank said.

Last week, U.S. President Donald Trump imposed steep tariffs on exports from dozens of trading partners, including Canada, Brazil, India and Taiwan.

The tariffs imposed last week on scores of countries are likely to stay in place rather than be cut as part of continuing negotiations, Trade Representative Jamieson Greer said on CBS show "Face the Nation" aired on Sunday.

Last week, the dollar weakened after nonfarm payrolls increasing by 73,000 jobs last month, after rising by a downwardly revised 14,000 in June, which revived hopes of a Fed rate cut in September, with markets now pricing in an 81% chance, per CME FedWatch tool

Citi also highlights weaker U.S. labor data in second quarter of 2025, institutional credibility concerns have increased regarding the Federal Reserve and US statistics, and elevated geopolitical risks related to the Russia-Ukraine conflict.

Gold, traditionally considered a safe-haven asset during political and economic uncertainties, tends to thrive in a low-interest-rate environment.

Citi estimates gross gold demand has risen over one-third since mid-2022, nearly doubling prices by second quarter of 2025.

The strength in gold demand was driven by strong investment demand, moderate central bank buying and resilient jewellery demand despite higher prices, the bank added.

By Reuters

Source: Yahoo/Finance

Taking a Reverse View On Gold

If data shows a strong correlation between obese people and the consumption of diet soft drinks, then conventional wisdom might lead us to speculate that perhaps artificial sweeteners are contributing to the problem. Cause and effect. 

But if you reverse the argument you have a very different insight … perhaps the obesity came first and the switch to diet drinks is an attempt to control their metabolism issue – so diet soda consumption is the consequence of the problem … and not the cause. This paradox is called “reverse causality”. 

Now try the same exercise with the gold market.

It is clear that gold prices have roughly doubled in 18 months and the cause is thought to primarily be unreported central bank buying – the explanation is clear and the arguments well-rehearsed ... de-dollarisation, inflation expectations, geopolitical uncertainty etc etc. This points us straight to China and perhaps a few of their BRICS friends. There is some data to suppose this but it's thin and largely anecdotal.  

Now reverse the issue … and let me give you a mandate to acquire as much gold as you possibly can over the next 10 years and at the best possible price … what would you do ? And how might your actions be manifested ?

To start with, discretion would be essential... (and articles like this, unhelpful). If the world knew there was a universal buyer in the market and prices only likely to rise, then the market would rapidly escalate … and you would have failed in your mission. For that, a big tick in the box … commonly available statistical data shows very little to account for the rapid appreciation in the price. 

Then you might consider opaque ways of acquiring physical gold. Not easy, it is a finite market and the effects of your buying can normally be observed through subtle and often ignored measures such as logistics rates, refining terms, backlogs for delivery, import stats etc … sectors very rarely monitored or reported on. So far, so good. Nothing to see here … go about your business. 

Likely you would deal through a very narrow network of trusted suppliers … and yes, those that say don't know … and those that know, don't say. 

What other measures would you instigate ? Take command of the price discovery process ? Build your domestic brands internationally ? Let the market know just how central you now are ? Definitely not. In much the same way that you don't see Chinese branded cars prominently on the streets of London or New York, why frighten the horses ? The US may relish hard power, others achieve market domination through soft power. 

You would closely observe the gold price action too. The laws of supply and demand dictate that your desire to acquire gold would eventually manifest itself in rising prices … but once it was declared that gold was technically “overbought” you would ease back and then brief periods of consolidation or even some profit-taking would provide good cover for your true desire. Observable price corrections would be present, but rare … too good a chance to fill the coffers at an attractive price … so prices would rise but not get ahead of themselves and dips would be short and brief … sound familiar ? It might also explains gold's ambivalent correlation with traditional price drivers.

By tradition the East has been price-sensitive to rising prices, especially the jewellery sector and hence it is usually met with reduced demand in rival Asian markets … great, more for us. Over the last 3 years the world's former largest market - India - has seen jewellery demand fall by about 10% which has been offset by a rise in investment demand … in short, they are not part of this story. 

What should our central bank report by way of gold purchases … how about some (to sound plausible) but not too much. Over the last 18 months China has officially reported purchases of 316 tonnes out of about 1600 tonnes acquired by central banks globally – so less than 20%. Sounds about right.

As a manufacturing power-house, what should we do about gold refining capacity ? Build it … but quietly. In 1991 there were 48 London Good Delivery Gold Refineries of which only 1 was Chinese … today there are 66 LGD refineries and 15 of these are Chinese (17 if you include Hong Kong). 

What about PR and Comms ? Well, if you wanted to be tricky you might encourage anti-gold sentiment in the West … not saying they are behind this but anyway, the West does a pretty good job in ascribing gold with an “alternative” status and remember “cash for gold” … we in the West have a tendency to cash out. 

The flow of gold from the West to the East has been the story of several hundreds of years … in Marco Polo's time we received spices for our precious metals, today we simply fill the shelves of Walmart. 

A little like Sherlock Holmes who approached problem-solving by eliminating the impossible and whatever remains is the cause, however improbable (eliminative induction) … in gold you end up with the same answer … and it is that China is discretely acquiring significant amounts of gold. In the 1960's gold was about 5% of total global financial assets - by the 1980's it was just under 3% - and  today it is still less than 1% ... which suggest the world at large has still not caught on about the powerful role it has to play in wealth preservation. 

When my wife asks me where we should go on holiday, rather than listing the usual obvious countries I sometimes reverse it by asking what do you fancy doing ? If the answer was say “kayaking” or “water sports” that might throw out the Dordogne Valley in France … which was never on the former list … which just shows how reversing things can sometimes generate a new way of looking at things … but in gold's case it merely seems to confirm them.  No ship Sherlock. 

By Ross Norman

Source: Metals Daily

Gold Could Reach $4,000 in 6-9 Months

Gold, which rose 2% this week to reach $3,357 an ounce Friday, could potentially climb to $4,000 an ounce in the next six to nine months, according to the State Street Global Advisors Gold 2025 Midyear Outlook.

Gold may even test the $5,000/oz. range in the next 12-24 months, according to SSGA.

Volatility in the markets — fueled by the Trump trade war, U.S. debt, and a weaker U.S. dollar — coupled with continued central bank purchasing of gold, are four of the main drivers of gold’s appreciation, according to Aakash Doshi, State Street’s head of gold strategy.

“The early days of the Trump administration have corresponded with heightened U.S. economic uncertainty, consumer anxiety, and a weaker U.S. dollar — buttressing investor demand for gold as a tail risk and geoeconomic hedge,” Doshi wrote in the midyear gold report.

“The post-pandemic period has been especially rife with structural shifts that remain unresolved,” Doshi continued, noting that since the World Health Organization declared the global coronavirus pandemic on March 11, 2020, gold has risen 98%.

In the first five months of 2025 alone, gold has risen 25%.

Institutional and retail investors alike are gravitating to gold as a low-volatility, portfolio-diversifying safe haven, according to the asset management firm.

Until there is clarity on the global trade war, inflation, U.S. political and military retrenchment, the $36.2 trillion U.S. deficit, and the U.S. dollar, the State Street gold strategists note, gold will continue to be an attractive alternative investment.

“In this environment, gold has the potential to stand out as a resilient store of value because it has no liability, does not depend on repayment, and does not require yield to justify its role in a portfolio,” Doshi said.

By Lee Barney

Source: NEWSMAX

Annual gold price forecast tops $3,000 for first time

Analysts in a quarterly Reuters poll have forecast an average annual gold price above $3,000 for the first time, with global trade friction and a swing away from the U.S. dollar powering demand.

The poll of 29 analysts and traders returned a median forecast of $3,065 per troy ounce of gold for this year, up from $2,756 predicted in a poll three months ago. The estimated price for 2026 rose to $3,000 from $2,700.

Spot gold prices have risen by a quarter so far in 2025, almost equalling the 27% increase recorded for the whole of 2024. Bullion, often seen as a store of value during uncertain times, has averaged $2,952 so far this year, according to LSEG data.

"Gold looks set for what can only be described as another epic year," said independent analyst Ross Norman. "Like in the early 2000s, gold is seeing buying on price strength which can have the effect of feeding upon itself."

Bullion broke above the $3,000 mark for the first time in mid-March and topped $3,500 last week as the trade battle between the United States and China, the world's two largest economies, boosted safe-haven demand, on top of persistent central bank buying.

Although the gold price has since eased to $3,273, analysts expect it to remain supported by the wild swings in U.S. tariff policies and what are likely to be protracted trade negotiations. [GOL/]

"Gold's fortune will continue to depend on other markets' misfortune," said Ole Hansen, head of commodity strategy at Saxo Bank. Bullion will remain supported, according to Hansen, as long as the focus remains on de-dollarisation and the impact of U.S. tariffs on global growth and fiscal stability.

At the same time, analysts warned of a crowded trade, while the high prices are curbing jewellery sector demand.

"Price risks persist given the physical market is wavering and central bank flows – while positive – are slowing, while an unwinding of tariff risk and fading recession risk can stall gold's safe-haven appeal," said Standard Chartered analyst Suki Cooper.

Silver, meanwhile, has underperformed gold with a rise of 12% so far this year, as it doesn't benefit from central bank buying while investment demand has been dampened by growth worries. Half of total demand for silver comes from the industrial sector.

The poll forecast an average 2025 silver price of $33.10 per ounce, unchanged from the previous survey. It has averaged $32 so far this year.

Analysts lifted their 2026 silver price forecast to $34.58 from $33.45, expecting a structural market deficit and the global clean energy transition to provide support.

By Anmol Choubey

Source: Yahoo

Gold/Silver Ratio Hits 100 to 1

If you can tell much about a person from how they behave under adversity, then so it is for metals.

When things are going swimmingly we can all look the part, but throw in a tariff-fuelled panic and things can change shape quite quickly. It is during price corrections such as the current one where markets show their true character. Just how strong is underlying sentiment. 

So what did we learn …

Seen through the silver lens … well we sensed silver was largely coming along for the ride but was not terribly enthusiastic. The merest whiff of a correction and silver was off and over the hill. Despite some compelling fundamentals and more than its fair share of hyperbole from its supporters, the reality is its support base was quite thin. The specs ran for the exit in an undignified and disorderly rush. The gauge to measure the relative price of gold to silver today nudged 100:1, the highest in 5 years (which was an all time high at 113. 

To show just how out of line things are for silver, consider that it is 14 times as abundant as gold and the true ratio should therefore be 14:1 and not 100:1 ... interestingly this was also the price differential in Roman times between respective gold and silver coins. 

The odd thing is silver has a good story ; five consecutive years of supply deficits, a tight market with lease rates nudging 6% and significant flows out to NY (and with no central banks to help out in extremis). (Unfounded) fears that it would be subject to tariffs also failed to make a discernible impact. Speculative positioning on COMEX looks encouraging at a near five year high and likely this is where we saw the sell off. 

I don't mind saying I am long silver in my pension and that position currently has a large question mark over it. 

It is also a truism to say you can also tell something about a person from the company they keep ; well it is starting to look like gold is dis-associating itself from silver. 

In a normal sharp sell-off one might expect or hope for a 50% bounce between highs and the low to validate that the market is actually in rude health … and we got that … or near enough. From a high of $3164. to a low of $3058 we should expect $3111 – and we are at $3107. 

It does beg the question why is gold and its alter ego silver on different paths and I think it underscores this is not a normal investment lead rally – it is a very narrow central bank one .. which favours the one … and not the other. 

My reading … all good for gold and we expect a steady price recovery in due course … while for silver, it needs to take itself aside and have a good hard think. 

By Ross Norman

Source: Metals Daily

Investors are finally paying attention as ‘gold thrives on uncertainty’

Gold prices continue to consolidate around $2,900 an ounce, but the precious metal has plenty of upside potential as investor demand continues to pick up, according to one market strategist.

In an interview with Kitco News, George Milling-Stanley, Chief Gold Strategist at State Street Global Advisors (SSGA), said that although interest in gold-backed exchange-traded funds (ETFs) has lagged in the current bull market, sentiment is quickly starting to shift as investors see new potential in the precious metal.

February was an unprecedented month for the gold ETF market as North American investors flooded into the marketplace. According to data from the World Gold Council, 72.2 tonnes of gold—valued at $6.8 billion—flowed into North American ETFs last month, the largest single-month inflow for the region since July 2020 and the strongest February on record.

Milling-Stanley said that with growing economic uncertainty and geopolitical chaos, investors are turning to gold as a safe haven and inflation hedge. Specifically, the bulk of investment capital has flowed into the SPDR Gold Shares (NYSE: GLD), the world’s biggest gold-backed ETF. State Street is the sponsor and manager of GLD.

Data from GLD shows that more than 20 tonnes of gold flowed into the ETF on Feb. 21, its biggest one-day increase in over three years. GLD holdings have increased by nearly 22 tonnes this year. Milling-Stanley said the inflows were valued at $1.9 billion.

Although GLD has seen a solid rise in its holdings, Milling-Stanley said there is still plenty of room for investment demand to grow. GLD’s gold holdings currently stand at 894 tonnes, down 33% from their all-time highs in December 2012. GLD holdings are down 30% from October 2020, the peak of the previous bull market.

Milling-Stanley said that he expects investment demand to continue to grow as the gold market has three significant drivers supporting the rally.

He pointed out that central bank gold purchases have been a paradigm shift in the global marketplace. Central banks have bought more than 1,000 tonnes of gold in each of the last three years as they have diversified away from the U.S. dollar.

Milling-Stanley added that a sharp rise in economic uncertainty and the growing threat of a recession will make gold an attractive safe-haven asset. At the same time, persistent physical demand in Asia supports higher prices.

“ETF investors have been a little late to the party, but I am glad to see that they have finally joined,” said Milling-Stanley. “?I think there's a very good likelihood that we will see investment demand continue to grow. The reasons behind gold’s rally are not going away; they're just getting stronger by the day.”

Milling-Stanley reiterated his 2025 price forecast, assigning a 50% probability that gold will trade between $2,600 and $2,900, and a 30% probability that prices could reach as high as $3,100 an ounce.

“We are seeing a lot of uncertainty, and the one thing I can say with complete confidence is that gold has always thrived on uncertainty,” he said.

By Neils Christensen

Source: Kitco

London Gold Shortages ???

Luntz : “We have put our words on steroids and amped the language up so high that unless we communicate in overdrive and hyperbole, we believe—perhaps correctly—that nobody will hear us.”

God the media do love a good panic don't they … but I suppose that's what sells … although one might have hoped for better from the Financial Times. Claims – no assertions – that London is running out of gold seems to have gripped the minds of the commentariat … but let me add a few thoughts :

Dealers in New York are 'standing for delivery' for physical on futures contracts that are normally either rolled month by month or cash-settled on fears that tariffs will be imposed on gold imports to the US. 

Yes, about 435 tonnes of gold has moved from London via Switzerland to New York vaults over the last few weeks which is worth about $82 billion. My first thoughts are – OK, to put that into perspective, that's actually about a couple of average trading days volume or turnover for the London gold market – interesting, but only maybe.

Firstly though, as for shortages … well London is sitting on about 8710 tonnes of gold according to the latest LBMA vault stats and the drawdown has not exactly moved the dial (see below). Yes, less than half of this is owned by other central banks, but the majority is ready and available 

 Second thought – so this is a logistical and conversion problem … fine ounces of gold are needed in one location (New York) > which needs to be converted into another form (in Switzerland) > and then shipped across the pond. Of course there are limitations on the Swiss refineries melting capacity to convert 400 ounce gold bars into the kilobars, as well as limitations on metal handling. Again … big deal. You've been in a car … temporary log-jams happen. 

Some refiners I met at the World Money Fair in Berlin last week suggested their kilobar capacity is currently booked out for the next 8 weeks or so to meet that demand.

And if 435 tonnes of kilobars are now in New York then surely the problem is as much about surpluses on one side of the Atlantic, as much as so-called 'shortages' on the other. Taking the 10 year average, the US purchases only about 20 tonnes of physical gold bars each year – so 22 years worth of bullion bars have just washed up on their shores. Likely as not, like last time (covid), these bars will simply be flown home to London (via the Swiss refineries where they are converted back into standard 400 oz bars) over the next few months. Nice business for some. 

And the reality is that over the last 2 months gold miners will have generated about 600 tonnes of fresh new metal … and with premiums on kilobars running high, it follows that much of that production will have been cast into (32 oz) kilobars rather than (400 oz) market bars to satisfy the US demand.

Yes, the Bank of England may have extended delivery periods just now but there are many other LBMA vaults in London as well as other international locations where metal can flow into the US. 

For sure some traders will have been caught out by the move and large profits and indeed losses will have been made – but there is also an unintended side effect. The scale and speed of the drawdown in gold has reduced liquidity in the market temporarily and the cost of borrowing gold has rallied from sub 1% to north of 10%. This has a detrimental impact on gold borrowers which includes bullion dealerships, jewellery groups, gold miners and others who optimize their working capital by borrowing gold rather than owning it outright ... yes, the very infrastructure that interfaces with gold consumers and makes our markets possible is being damaged. 

As you may have heard said ”a lie can travel halfway around the world while the truth is still putting on its boots.” So true. 

By Ross Norman

Source: Metals Daily

Precious Metals Forecasts 2025

GOLD

Average: $2888

High : $3175

Low : $2630

To know the future, you need to understand the past.

But with little or no consensus as to why gold achieved a 27% gain in 2024, it makes it especially hard to gauge whether the trend will prevail ; institutional (ETF) demand is flat, investment demand is lacklustre, while reported central bank demand is below the last 2 year levels. Worst of all and most perversely, gold's inverse correlation with many traditional macro drivers are out the window. 

Arguably, dollar strength and rising treasury yields may have only served to temper the rate of gold price increase - and hence them moving in parallel, suggesting to us that gold prices could accelerate again once the handbrake is off. This indicates to us good underlying strength in the market.   

Likely the significant price rise was down to unreported central bank buying as sovereign nations de-dollarise, coupled with outlandish Asian OTC derivatives plays. If we are right, then we see no reason for a change in mode in 2025 and the gold rally remains intact, but perhaps a little less so.

In 2025 the world may be more convivial, US economic prospects and the dollar brighten, plus we may well see an echo to inflation as we did in the 1970's – but we think this matters less than it should. The high conviction buying looks set to remain, even if the motive remains a matter of debate.

 ______________________________________________________________

SILVER

Average: $34.16

High : $38.46

Low : $29.10

Sometimes unkindly referred to as the 'cinderella metal' (because it often misses the ball) … silver did receive the memo in 2024 and posted a solid 33% gain on the year. Arguably though it should have done even better because, as gold's alter ego, it would typically be expected to significantly outperform during the seismic shift these metals are seeing.

Worryingly, while industrial demand is strong and rising sharply … and with the market set for yet another year with a supply deficit, physical investment demand is declining while institutional demand via the ETF is relatively lacklustre. Parallels with gold are clear. To mix metaphors, this is not yet a market firing on all cylinders. 

We estimate the supply deficit will be around 250 million ounces in 2025 satisfied by a commensurate drawdown in pipeline metal. That can only happen for so long.

Well at least silver is not an 'ugly sister', but to be clear, nor is this yet a fairy tale story either … and like cinderella popularity … or indeed an All Time High may take a little while. 

____________________________________________________________

PLATINUM

Average: $1046

High : $1175

Low : $900

If price predictions were only a matter of understanding fundamentals, then estimating supply deficits (or surpluses) then surely platinum would be the bookies favourite. But life is not like that. 

The good news is the broad economic outlook looks positive (although China is struggling just now) and with rising industrial production the broad demand for platinum can only rise. This provides a positive backdrop given the diverse range of applications where platinum is involved. 

More narrowly, last year's structural changes in the market in response to the low basket price for PGMs takes time to come through and these are now starting to bite. Additionally we expect to see a rowing back in ambitions for net zero and by extension EV's with the Trump administration – this would be to platinum's advantage, conferring some resilience to ICE engines and by extension, revving up sentiment. 

Meanwhile the one-off releases of inventory seen in 2024, coupled with high recycling levels suggests to us that the negative price impacts are behind us, setting the stage for a supply deficit of about 525koz. If we are right, then platinum is set for gains in 2025. 

_____________________________________________________________

PALLADIUM

Average: $968

High : $995

Low : $920

For palladium much of the bad news is already baked into the current price. 

Fundamentally demand is declining but mine production has also eased, leaving the palladium market roughly in balance. 

That said, the smelter rebuild in Russia has been faster than anticipated and hence we expect total mine production to remain relatively static and not a fall as had previously been expected.

Under the Trump administration the world will likely become more 'pro-oil' and less 'net zero', which could impact sentiment towards the PGMs positively even though actual demand will lag events. However, any significant price move to the upside will likely be muted given the large above ground stocks which could be readily deployed. 

After the heady days at a $3400 level, palladium seems to have found a floor, and while although longer-term fundamentals look positive, they look markedly less bullish than platinum’s.

By Ross Norman

Source: Metals Daily

SOUTH KOREA : The number of individuals investing in gold has increase

'Mixed money' due to the preference for safe assets 80 Billion Private Investments in December.

As financial market instability continued in the impeachment process, the number of individuals investing in gold, a representative safe asset, has increased significantly.

The number of individuals investing in gold has increased significantly as financial market instability continues in the impeachment process. As investment volatility has rapidly grown, with the impeachment of Yoon Suk Yeol's president being passed by the National Assembly after the December 3 emergency martial law incident, it is believed that money is flocking to representative safe assets.

According to an analysis of gold trading data on the Korea Exchange on the 16th, individual investors net purchased 80 billion won worth of gold through the exchange until the 13th of this month. From the 4th to the 13th, after the emergency martial law crisis broke out, the amount of gold purchased by individuals amounted to 62 billion won (501kg). It swept 12.1% of this year's total net purchases (512 billion won) in eight trading days.

During the same period, banks, securities firms and other institutions bought twice as much gold (34 billion won). Considering that individuals sold 4 billion won of gold during the same period last year, the atmosphere has changed significantly.

Currently, there are four ways to invest in gold: 

1 - gold transaction through the Korea Exchange 

2 - gold bar real transaction 

3 - gold banking (gold investment bank account) 

4 - gold spot exchange-traded fund (ETF) investment. 

Among them, real gold transactions are gold transactions through the Korea Exchange and real investments in buying real gold bars.

When selling a gold bar, you do not pay any tax on the profits from the sale, but you have to pay VAT (10%) and sales commission (5%) when you purchase it. VAT and fees are not returned when the real gold is sold.

Gold transactions through the Korea Exchange are basic to conduct financial transactions on a 1g basis. Although there is no tax on profits from trading, there is a transaction fee of 0.2 to 0.3%. Investors can also withdraw gold bars in real life if they want. However, in this case, a 10% VAT and a fee of 20,000 won per gold bar (100g, 1kg unit) are charged, so it is good to pay attention.

Baek Seok-hyun, an economist at Shinhan Bank, said, "Gold prices have been rising sharply this year, but in the long run, it is still worth the investment," adding, "The strategy of dividing the period and buying in installments is effective."

By Kim Junghwan

Source: Maeil Business Newpaper

Jewelry ‘Most Resilient’ Luxury Category in 2024

In a year that will see only one third of luxury brands reach positive revenue growth, jewelry was the most resilient segment, according to Bain & Co. 

Overall, the personal luxury-goods market is forecast to fall 2% to EUR 363 billion ($383.48 billion) in 2024, the first slowdown since the recession of 2008, excluding during Covid-19. Meanwhile, total global luxury spending will remain flat at around EUR 1.5 trillion ($1.58 trillion), Bain reported last week in its Bain & Company Luxury Study, released in collaboration with Italian luxury-goods company Altagamma. The decrease is the result of declining interest in luxury by younger consumers, which has led to its customer base shrinking by about 50 million over the last two years. 

“Jewelry is holding strong, especially favored by the high-jewelry segment and by a remarkably positive performance within the US market,” Bain explained. “Watches, leather goods and shoes have seen a slowdown as consumers downtrade and are increasingly selective about purchases.”

However, the secondhand market is gaining traction as consumers seek “value” purchases, primarily when it comes to jewelry, heritage apparel and leather pieces, Bain noted.  

Sales of luxury goods in Japan and Southern Europe have remained solid, while the US is seeing continued improvement. China has experienced a rapid slowdown, while conditions in South Korea are challenging, Bain said. 

The luxury market is expected to see a slight improvement in 2025. After that, Bain expects growth to pick up due to anticipated increases in wealth and a growing luxury consumer base, and by 2030, the market will likely begin a long-term positive trajectory. 

“To secure future growth, brands will need to rethink their luxury equations, reestablishing creativity and blending old and new playbooks,” said Federica Levato, a partner at Bain and leader of its Europe, the Middle East and Africa (EMEA) fashion and luxury practice. “This includes rediscovering their essence and embracing the foundational pillars of the industry: desirability fueled by craftsmanship, creativity, and distinctive brand values; meaningful, personalized, and culturally resonant customer connections and experiences; and tech-enabled flawless execution.”

By Leah Meirovich

Source: Rapaport