Bullion analyst Sanjiv Arole unpacks the dramatic shifts in the 2025 precious metals market. Gold led the race early on, but silver and platinum have since surged ahead. What caused this reversal—and can gold bounce back? Arole dives into the trends, fundamentals, and what the rest of the year might hold.
In racing parlance gold was considered the odds-on favourite to be the top performer in the precious metals segment for the year 2025. In fact, gold got off to a flying start this year as it set a scorching pace boosted by the T(rump)-missile, soaring by over 32% to scale its all-time high of $3,500 per ounce by 22 April 2025. However, since then gold faced its own ups and downs, and is currently around $3,274 per ounce (28th June, 2025) still up by over 23%, year-to-date.
Silver followed in gold’s slipstream most of the time, it was not able to break through the $34 per ounce barrier till 3 June 2025, for the first time in over a decade. Then, it lived up to its dark horse tag, zooming well over $37 per ounce as it scaled $37.26 per ounce on 17 June, 2025 However, the real dark horse was platinum as it came from well below $1,000 per ounce ($911 per ounce at the start of the year) to take off since mid-May to over $1,442 per ounce on 26 June, 2025, a whopping 58% plus since the beginning of 2025, more than a decade high price. Even palladium gained by over 24% from 2 January 2025 to-date. Quite suddenly gold had lagged behind in the precious metals segment.
The sudden shift away from gold to silver and platinum foxed many, particularly due to the ongoing tensions in the Middle East as both Israel and Iran rained missiles and drone strikes on each other while Israel bombed Iran and Gaza. As if that was not enough, the Nobel Peace Prize aspirant ordered the bombing of Iranian nuclear sites into oblivion. However, while platinum and silver broke long time records, gold retreated and went into consolidation mode below $3,300 per ounce. Is it investor fatigue in gold? Is the interest in both platinum and silver just speculative? Can gold turn the tide in the second half or will silver and, in particular, platinum rule the roost in the second half of 2025. What do fundamentals in silver and platinum show?
Let us look at the fundamentals of platinum first by referring to a recent Johnson Matthey report: The sudden surge in platinum price by over 58% in just a month or so could be attributed to several factors: a third straight year of deficit with demand exceeding supplies, apart from that there were supply issues (disruption in flow of supplies due to Iran-Israel war and concern over South African production), increased demand in industrial usage and jewellery as well as speculative demand for platinum ETFs.
A more detailed analysis of the demand outlook for 2025 reveals interesting sidelights: the very high gold prices has seen a shift in jewellery demand from gold to platinum in recent times, restocking of platinum jewellery is being seen in China and other Asian markets, industrial demand for catalytic converters in automobiles and hydrogen cells has seen a significant increase in demand. Geopolitical tensions in the Middle East with USA too joining the fray has led to fears of supply disruptions in the PGMs and platinum in particular. However, whether the current rise in platinum prices is sustainable remains to be seen. It is too early to predict the future of platinum in the second half of the year.
Let us now look at silver in detail. Silver is often referred to as poor man’s gold. Moreover, silver views gold as a big brother dictating terms and handing out crumbs when gold is on its bull run and whenever gold slumps silver too is dragged along unless the economy is booming and industrial demand is pushing silver along. There is a sibling rivalry of sorts as silver views gold as a bully. Silver bulls cannot ever be satisfied even if the silver price is showing a rise as they often compare it with gold and then brood if gold has done much better.
The recent Silver report published by the Silver Institute could bear this out. The salient features of the report made by Metal Focus for the Silver Institute are: 2024 was a great year for silver as its price registered a 21% intra year increase, while its annual average rose by over a fifth to its highest since 2012. The fundamentals were robust with the market registering its fourth consecutive deficit. However, even though the deficit fell by 26% year-on-year it remained high at 148.9 moz (4,632 tonnes), equivalent to 15% of global supply. The year 2025 is also predicted to be a deficit year. The silver demand in the main was supported by a record offtake in industrial demand, with all its major segments showing gains. However, further declines in bars and coins offtake resulted in a modest decline in total demand. Total supply rose by 2% last year mainly due to higher recycling and a slight increase in mine production.
In spite of the above, the exceptionally strong performance of US equities due to various factors saw a boost in wealth creation and portfolio diversification flows, mainly into gold but this also benefitted silver. Turbulent geopolitical conditions and policy uncertainties supported the silver price through their boost to safe haven investment in silver. Then, any boost to gold demand due to Central bank purchases, etc. saw silver getting residual benefits as well.
The sudden rise in the silver price to around $37.26 per ounce during May-June 2025 could be attributed to a combination of factors including increased industrial demand, safe-haven buying amidst geopolitical and economic uncertainties, and supply bottlenecks. Specifically, strong demand from the electric vehicle and solar energy sectors (PV cells), coupled with ongoing tensions like the Ukraine war and the wars in the Middle East involving Israel and with the US too jumping in the fray has driven investors towards silver as a safe haven asset. Additionally, a potential global recession and inflationary pressures could further fuel demand for precious metals. A recession could negatively affect industrial metals like silver, platinum, and palladium—unless safe haven demand is strong enough to offset the drop in industrial demand caused by the slowdown.
Meanwhile, in India, there has been a gradual shift in the pricing of gold jewellery. In the past, gold jewellery pricing had three components: the gold price of the day, its weight, and making charges. The customers bought gold jewellery mainly as an investment option and they were concerned with gold content and the gold price of the day. They purchased according to their budget allocations that was pre-determined. However, in recent times the jewellers, mainly the large jewellery chains and that too in metros, price their jewellery on per piece basis and do not divulge any information on the components (price, weight or making charges), unless specifically asked. They want jewellery to be priced based on its artistic value, design, etc. Just like in diamonds or paintings by famous artists. Thereby, taking the investment aspect out of gold jewellery pieces. In the past, due to the high premium on the gold price in India, the earlier pricing mechanism was acceptable to the jewellers. But, now with the gold price even going at a discount to the landed cost of gold, that pricing is not viable for stores that spend huge budgets on marketing of jewellery. Therefore, there is also an increase in push for studded jewellery in the domestic markets.
But that has led to a piquant situation, particularly in smaller towns and the rural areas as the customers there still look at gold jewellery as an investment option as well. They cannot simply afford such a pricing system. In fact, even in metros those who want to buy their jewellery as an investment option have to find retailers who price their jewellery the old way. If they are denied this option then they could shift from gold jewellery to other investment option like silver jewellery, etc. It could have a great impact on rural economy as population there could suddenly find themselves devoid of their only global insurance cover against economic hardships. It could greatly impair their ability to overcome economic stress. For, silver though cheaper, is not feasible to store due to its bulky volume.
Many of the buyers of gold are not comfortable with online gold investment options like, gold ETFs, digital gold, gold bonds, paper gold, and so on. They appear not to trust online options with the surfeit in online frauds. They prefer gold in physical form and likewise want gold jewellery to be priced the earlier way. Ultimately, market forces will determine how gold jewellery is priced.
Currently, silver seems to be outperforming gold, albeit by a small margin. The gold:silver ratio that was around 103 in February 2025 is now around 90. While the gold price is hovering around the Rs.1 lakh per 10 gms, silver is around Rs.1,08,000 per kg. Silver seems to be aiming for Rs.1.25 lakh per kg as investors have as yet not quite sold off their silver to make a good profit due to the high price. There seems to be very little silver by way of scrap inflows as investors seem to be holding on to their silver in anticipation of much higher prices. Gold did see some scrap inflows, but that appears to have dried up. Rural India too does not appear to be in any great financial stress at the moment.
Can silver ever replace gold as a safe haven investment option, even while outperforming gold? The answer is an emphatic and unambiguous ‘No’! The high value of gold makes it a good storage option. For, one can carry 100 gms of gold valued around Rs.10 lakhs quite easily on the person. Can one carry Rs.10 lakh-worth of silver just as easily? Likewise, one can store even 10-50 kgs of gold easily in one’s home in a cupboard. The value of 10 kgs of gold would be approximately Rs.9 crore or above depending on the price of gold. What would the quantity of silver required for the value of 10-50 kgs of gold? Can that be stored easily by a person at home? That could possibly give an answer as to why gold is an integral part of India’s rural economy.
Finally, when gold zoomed to its all-time high of $3,500 per ounce very briefly on 22 April, 2025 it seemed that the yellow metal was in the right place at the right time and it would be plain sailing towards $4,000 per ounce and above in the time ahead during the remainder of the year.
Alas, that was not to be as gold has since then been confined in the $3,300-3,400 per ounce region. This consolidation has baffled one and all. For, the Ukraine war has continued with ebbs and flows, Israel did not let up in its pounding of Gaza, the two nuclear-armed neighbouring countries had a four-day intense mini-war in early May. Then, Israel began bombing Iran’s nuclear sites and even targeted and killed Iran’s top scientists as well the top brass of its defence forces. And as if all that was not enough, the US tried to wipe out three of Iran’s nuclear sites by using bunker busters from their B2 bombers.
Normally, this should have seen gold on its way to $4,000 per ounce in a hurry. But that was not to be, as after a brief attempt to break the $3,400 per ounce mark, gold has been busy defending the $3,300 per ounce support levels and falling to around $3,274 per ounce at the end of June. Seemingly, US Fed chief Jerome Powell’s refusal to cut interest rates and some favourable (not to gold) economic data has stopped gold’s progress.
As a result, in the Trump v/s Powell saga, Powell appears to hold the upper hand as he has repeatedly said that the impact of disruptions due to tariff changes and its effect on inflation had to be gauged before cutting interest rates. Trump’s ability to disrupt global economy through his tariff moves and flip-flops and fanning conflicts worldwide have not been able to breech the Powell wall. Jerome Powell continues to be gold’s nemesis even after two interest rates cuts in 2024. He has single-handedly stopped gold in its tracks.
But all is not lost for gold as Powell has indicated that there would be two rate cuts in the remainder of 2025. Moreover, Trump’s deadline of 9 July on tariff rates could hold the key to further chaos in global trade. Gold awaits with bated breath for that opening. Fingers crossed!!