Commodities weekly: Gold stalls, spotlight shifts to ‘cheaper’ silver and platinum

Elsewhere across financial markets, sentiment remained cautious. Traders and investors continued to grapple with the uncertain global economic fallout from President Trump’s trade war—an issue reignited despite a recent 90-day truce between the US and China. The US Court of International Trade had initially blocked the bulk of Trump’s sweeping tariffs, ruling them an unconstitutional use of emergency powers under the International Emergency Economic Powers Act. However, a federal appeals court subsequently granted a temporary stay, reinstating the tariffs pending further review. The legal whiplash added to global uncertainty, with markets unsure whether these aggressive trade policies will be ultimately upheld or struck down.

Compounding the unease, President Trump’s so-called “big beautiful bill”—a sweeping tax and spending package projected to add between USD 3 to USD 5 trillion to the national debt—has stoked fresh concerns over runaway deficits and rising inflation. The bill sparked a high-profile clash between Trump and Elon Musk, who called it a “disgusting abomination” that recklessly inflates the federal deficit. In response, Trump lashed out, branding Musk “crazy” and threatening to tear up key federal contracts and subsidies that benefit Tesla and SpaceX.

While some observers dismissed the feud as political theatre, it underscored the increasing dysfunction in Washington, where the administration appears more focused on picking fights than offering credible economic solutions. The broader consequence is growing investor anxiety about America’s fiscal and political stability. This uncertainty—combined with the increasing politicisation of American business—has begun to erode global confidence. As a result, investors are now demanding a premium to hold US government bonds, and the dollar remains under pressure despite a widening yield advantage over other sovereign debt markets.

These dynamics have further incentivised investors to diversify away from traditional financial instruments and toward tangible assets. Gold continues to be the primary haven, but with bullion demand showing signs of stalling as investors look for a fresh trigger to propel prices higher, we have instead in recent weeks seen heightened interest in silver, platinum, and to a certain extent also copper—all benefiting from tightening supply conditions. These commodities are viewed as politically neutral; unlike sovereign bonds or foreign currencies, they carry no counterparty risk and are not tied to any nation’s credit rating. This is precisely why gold remains a cornerstone of central bank reserves worldwide—and why other metals, supported by a tightening supply outlook, are now increasingly seen as a rational hedge against political and financial instability.

Silver breakout leaves gold trailing

Despite silver’s occasional volatility—especially relative to gold—the white metal has been on an upward trajectory since September 2022. While gold has garnered most of the attention, silver’s performance has been roughly on par, with both metals doubling in value during this period. However, unlike gold, which must break new record highs to continue its advance, silver remains well below its 2011 peak near USD 50, potentially offering room for further outperformance as investors hesitate to buy gold at record prices.

From a technical perspective, the break above USD 35 not only signals a 13-year high, it also reflects a break above the 0.618 Fibonacci retracement of the 2011 to 2020 downward move, potentially from a technical perspective not leaving much in terms of resistance before USD 40. However, with the initial move carrying the hallmark of momentum buying from speculators buying the break above resistance-now-support in the USD 35-area, the rally needs to extend further in order to reduce the risk of liquidation from recently established long positions.

Platinum rally resumes after brief, shallow pullback.

Platinum, which recently broke above USD 1,025—surpassing a long-term descending trendline that originated at the 2008 high of USD 2,300—resumed its ascent following a brief and shallow correction. An often-overlooked semi-industrial metal, which a decade ago traded on par with gold, before seeing its relative cheapness as seen through the gold-platinum ratio hit a record 3.6-to-1 last month. However, supported by fundamentals leading to the mentioned technical breakout, the metal has gained some traction these past few weeks, after the World Platinum Investment Council, in its latest Platinum Quarterly report, projected a third consecutive annual market deficit, with demand expected to outstrip supply by nearly one million troy ounces.

This anticipated shortfall, which will draw down existing above-ground inventories, is being driven by demand from the automotive sector and, notably, a surge in Chinese interest in jewellery, bars, and coins. Last month, China recorded its highest platinum imports in a year, spurred by the metal’s relative price stability and its significant discount to gold. The shortfall could accelerate if the current demand from investors continues, not least through demand for platinum-backed exchange-traded funds, which during the past two weeks have seen total holdings jump 111,000 ounces to a ten-month high at 3.29 million ounces.

Gold rangebound as traders pivot to silver; policy shift could fuel rally

Gold remains rangebound after a technical breakout above the downtrend from its April 22 record high of USD 3,500, failed to attract renewed and strong buying interest. Instead, traders have shifted their focus to silver and platinum. While we remain cautious about predicting an imminent surge to new all-time highs, the macroeconomic backdrop is increasingly supportive of precious metals. A potent mix of rising fiscal debt concerns, tariff-driven supply shocks, weakening consumer confidence, a softening labour market, and continued dollar weakness may soon prompt a dovish—and potentially stronger-than-expected—policy shift by the Federal Reserve. Combined with the risk of higher inflation and central banks extending their gold-buying spree into a fourth consecutive year, the groundwork for a potential push toward USD 4,000 cannot be ruled out.

Managed money positioning across key metals

In the latest reporting week ending May 27, speculators in the managed money category held net long positions across gold, silver, platinum, and copper. Platinum saw a notable buildup in speculative longs following a breakout, while positioning in the other metals remained relatively muted. This leaves ample room for accumulation once the technical and/or fundamental outlook becomes more favorable—as was the case with silver over the past week.

Meanwhile, the binary nature of the upcoming U.S. copper tariff decision—and the risk of a potential volatility spike following any announcement—continues to suppress speculative interest in copper. Nevertheless, traders are maintaining a cautiously bullish bias.

Crude holds firm despite growing supply glut risk

WTI and Brent crude oil continue to trade within a relatively wide USD 10 range, established after the sharp selloff in early April. This slump followed renewed concerns over President Trump’s trade war policies and an OPEC+ announcement to accelerate the unwinding of 2.2 million barrels per day (bpd) in voluntary production cuts. The move, seen as a response to overproduction by some members, was also aimed at gradually regaining market share from high-cost producers.

On the demand side, rising consumption of gasoline and distillates ahead of the peak summer season for driving and air conditioning has helped underpin the market. Meanwhile, several supply-side risks are offering additional short- to medium-term price support. These include recent wildfires in Canada threatening production, the risk of supply disruptions in Libya due to political unrest, and the recent revocation of Chevron’s license to operate in Venezuela—potentially impacting around 220,000 bpd of output. Additionally, persistent geopolitical tensions, including the Russia-Ukraine war and the looming threat of renewed US sanctions on Iran if nuclear talks break down, are keeping a floor under oil prices.

Brent crude, currently trading around USD 65.50, remains confined within a broad USD 58.50 to USD 68.50 range. In addition to the short-term supply risks previously mentioned, the recent price uptick has also been driven by buying activity from speculators who were caught off guard by the market’s resilience. However, once this momentum-driven buying exhausts itself, further upside is likely to remain capped, particularly as OPEC+ continues to add supply incrementally on a monthly basis.