Head of Commodity Strategy
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Key points:
Gold has settled into a relatively narrow, but downward-trending range as it consolidates after several months of strong performance. This rally peaked last month when the yellow metal reached an all-time high of USD 3,500, before undergoing a sharp correction. The downturn followed President Trump’s decision to roll back some of the aggressive tariffs that had initially triggered market volatility—an apparent attempt to reduce uncertainty amid signs of economic strain.
Currently, gold is lacking a clear directional trend, primarily due to conflicting macroeconomic signals and investor hesitation. Markets are waiting to assess the full economic impact of Trump’s shifting trade policies. Most analysts expect the broader effects to be negative, which could prove supportive for gold, particularly under the looming risk of stagflation—a scenario characterized by slowing growth combined with rising inflation.
Although upcoming U.S. trade agreements—especially with major partners in Europe and Asia—could help mitigate some of the adverse economic effects and reduce demand for traditional safe-haven assets like precious metals, persistent concerns remain. Chief among them is the widening U.S. budget deficit, which raises alarms about long-term fiscal sustainability. In our view, this, combined with stagflation risks and continued central bank demand, will likely continue to support investment interest in gold and other precious metals such as silver and platinum.
As illustrated in the chart below, gold is trending lower, marked by a series of lower highs. The downtrend is currently capped by resistance at USD 3,347, with a more significant barrier at USD 3,355, the 0.618 Fibonacci retracement level of the April–May correction. This confluence creates a well-defined resistance zone that must be broken for new momentum buying to materialize. On the downside, key support levels can be found at USD 3,272 and USD 3,244 based on retracement levels.
Silver continues to trade within a wide horizontal range, with strong support at or just below USD 32. On the upside, multiple attempts to break higher have stalled ahead of USD 33.70, establishing this as the key level to watch before bulls can challenge last October’s 12-year high of USD 34.90. The gold-silver ratio—currently hovering near 100 ounces of silver per ounce of gold—is notable as a gauge of relative strength. During April’s volatility, the ratio surged from around 90 to over 105 as silver experienced a deep correction. However, it has since eased as silver regained ground, buoyed by reduced economic uncertainty following the U.S.–China trade truce. Metals with industrial applications, such as silver, tend to benefit from improving trade sentiment. A sustained move below a ratio of 98 could signal growing investor preference for silver over gold.
Platinum—an often-overlooked semi-industrial metal—has recently shown signs of resurgence. Once on par with gold, platinum's value fell over the past decade, culminating last month when the gold-to-platinum ratio hit a record 3.6-to-1. However, supported by fundamentals leading to a technical breakout, the metal has gained some traction this past week, 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 jewelry, 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.
Platinum recently broke above USD 1,025, surpassing a long-term descending trendline that originated at the 2008 high of USD 2,300. It has since climbed to a two-year high near USD 1,100. The breakout has attracted increased speculative interest from momentum-driven traders, both in futures and ETFs. Holdings in ETFs jumped by 74,000 ounces to a three-month high.
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