Against the backdrop of Fed rate cuts, geopolitical flashpoints, and shifting global reserves, gold and silver are scaling uncharted peaks, defying old patterns and hinting at a new era for precious metals, writes bullion analyst Sanjiv Arole.
History has as a strange way of repeating itself! Way back in January 1991, at the time of the Persian Gulf War – The Dessert Storm – unleashed by US president George Bush Sr. and his allies on Iraq, in search of the elusive WMDs (weapons of mass destruction), gold was around $373 per ounce in mid-December 1990. As the war clouds darkened over the horizon and war drums began to rumble gold rose smartly to $403.70 per ounce by 16 January 1991. However, when war actually broke out gold declined to around $393 per ounce. In fact, gold never neared $400 per ounce levels again in the year as well. Not only that, gold failed to go anywhere near the $400 per ounce mark in the entire 1990s decade. Gold ended at its lowest level in the 1990s as it fell to around $250 per ounce in 1999. Then, gold was plagued by a strong USD, high interest rates, Central Bank (CB) sales, booming stock markets, forward sales by gold miners, etc. Silver’s story was no different as it was stuck in the $3 & $5 per ounce region.
In a way, the current scenario in 2025 is not much different. On the day of the Jackson Hole Symposium speech by the Fed chief, Jerome Powell, gold was around $3,328.40 per ounce and silver was near $37.5 per ounce. After Powell hinted about a rate cut in September with a couple more cuts by the year end. Both gold and silver made their move as more positive economic data arrived for gold. Gold moved up by over 11% to $3,703 per ounce around 16-17 September 2025; when the Fed chief announced a 0.25% rate cut in the FOMC meeting. Silver too followed gold as it also first climbed to over $43 per ounce by 16-17 September from $37.5 per ounce, up by 14.9% from the Jackson Hole speech date. History reared its head as gold slumped to $3,643 per ounce within the next couple of days, silver too followed suit as it declined to $41.265 per ounce.
However, there was a twist in the tale for gold as well as silver did not follow the 1991 script this time in 2025. Gold zoomed to yet another all-time high of $3,790 per ounce and more, within hand shaking distance of $ 3,800 per ounce while silver too crashed through the $44 per ounce mark and reached $ 44.32 per ounce on September 23rd 2025. Gold is now into unchartered territory as it dreams about $4,000 per ounce even in 2025 itself if the dice rolls in its favour. Silver as well is in deep waters that it last ventured in April 2011.
The supporting cast for gold, geo-political tensions was very much in attendance. Israel continued its ground offensive into Gaza killing hundreds of people every day as it appeared to be determined in its new goal of annexing the West Bank. Israel even went in pursuit of Hamas leadership as it carried out airstrikes in Qatar’s capital Doha. US too used its veto power to thwart attempts to censure Israel at the UN. With more European nations recognising Palestine by the day the global tensions are on an upswing. The on-going US-Venezuelan crises due to US military action on Venezuelan drug lords could spiral out of control as China and Russia seemingly were poised to take control of Venezuelan oil. Then, the Ukraine war appears to shift into another gear as Russia captured more territory and the US stating NATO could regain all lost territory.
Thereby, raising global tensions, and aiding gold as well silver and rest of the precious metals gang. On top of all that, the on-going uncertainty on account of reciprocal tariffs and its resultant impact on global trade is making markets very volatile. There is all round confusion as some of the tariff decisions are frequently changed. Little wonder that gold and silver are on a high with gold challenging $3,800 per ounce briefly and silver crossing $45 per ounce while platinum and palladium too surged forward from their narrow range.
In his latest speech, Jerome Powell warned that the Fed faced challenges in going ahead with rate cuts in future. He stressed that cutting interest rates too aggressively would keep inflation elevated, adding that there was no risk-free path forward. He further stated that the Fed must carefully balance inflation control with supporting economic growth. The main aim being to boost the labour market by lessening jobs risks. He underlined his point about rate cuts fuelling inflation.
In recent times, several new trends appear to have emerged in global commodity markets. The LBMA held a series of LBMA Digital Gold webinars a few years ago trying to make a case for Digital Gold. For, it provides secure low-cost physical ownership of a regulated liquid asset which is easily accessible and divisible and can move at the speed of the internet. However, despite a plethora of digital gold launches, the total amount invested is still a fraction of the more than $10 trillion total market for gold investments or even the $2 trillion-plus Bitcoins market. Gold-backed tokens seem to be the way ahead for digital gold. It is still in a nascent stage, but given the multi-trillion gold investment market and the huge success of gold ETFs, digital gold seems waiting to take off. It is pertinent to note that digital gold has the solid backing of physical gold, but bitcoins are primarily technology based akin to the dot coms at the end of the last century. We all remember what happened with that dot.com bubble! Will bitcoins go the same way? An expert at goldsilver.com has given a clear message: Bitcoin may be a commodity and a store of value, but it is not money in the same way gold and silver are. Its future depends on confidence and perception, while gold and silver’s future is rooted in physical, intrinsic value.
Interestingly, for the first time since 1966 CBs across the world hold more gold than US treasuries. Although, the USD is still dominant in global reserves this shift could signal a decline of USD in times to come. Moreover, CBs across the have embarked on a gold-buying spree over the last three years at least. They purchased 1,082 tonnes in 2022, 1037 tonnes in 2023, 1,180 tonnes in 2024. Though, 2025 is comparatively slower in the first half of the year, experts believe that 2025 too would be a good year for CB purchases. Then, while US holds around 8,133 tonnes of gold with its CB, a constant for many years, other CBs combined hold far more gold in its reserves. Does it mean a shift towards an accelerated de-dollarisation process or towards a regime of a currency system that is dominated by gold? Only time will tell!
Then, global gold ETFs have seen remarkable inflows in 2025 from January to-date reaching US$57.1 billion by the end of August, the highest on record since the 2020 peak, with a total asset under management of $445 billion. Europe and North America have dominated global inflows even though Asia and some other regions saw smaller outflows. Global gold ETFs holdings reached approximately 3,639 tonnes as of September 2025, still much below the 3,915 tonnes seen during Covid-19 times. In India, inflow of gold ETFs aggregated $8.83 billion, a record high of Rs.724 billion with total gold holdings at 70 tonnes. However, for the year 2025 to-date it is $1.23 billion, in the main driven by market volatility, investor demand as a safe-haven asset amid market uncertainties.
As far as silver ETFs are concerned, global silver backed ETFs inflows for the first half of 2025 were around a record 95 million ounces for the period, more than exceeding the entire 2024 inflows. This has resulted in record high total holdings of 1.13 billion ounces by mid-2025 valued at $40 billion, led by record high silver prices and strong industrial demand so far. In India, silver ETFs saw a strong inflow of around Rs.3,331 crores (1,200 tonnes) by August 2025, driven by record silver prices and investor appetite for the metal.
Elsewhere, in the aftermath of US Fed’s 0.25% rate cut in mid-September 2025, gold has risen by over 43% from the beginning of the of the year to an all-time high of $3,791.09 per ounce, silver has surged by around 60% to $46.68 per ounce (14-year high) from the start of the year and platinum zoomed up by more than 74% over the same period to $1,588 per ounce. The addition of silver as a critical mineral by the US Geological Survey’s 2025 draft list has enhanced silver’s role as a critical metal due to its essential role in the green energy transition and modern technologies, including solar panels, electric vehicles and electronics. The classification of silver as a critical mineral could lead to government support for domestic production, recycling and stockpiling to ensure the nation’s supply, etc. All of which could give a boost to the silver price. Then, the Chinese Premier’s commitment towards green energy by setting fresh targets probably caused both silver and platinum prices to surge last week due to their usage in green energy technology.
Meanwhile, a research outfit predicted that silver would scale $50 per ounce in the longer term, but with silver already nudging $47 per ounce, the white metal could surpass its long time all-time high of $50 per ounce set in 1980, anytime sooner than later, even in the near term future. Gold too could think about $4,000 per ounce more with hope than merely dream about it. In the domestic markets, both gold and silver scaled their all-time highs recently. Gold crossed Rs.1,14,000 per 10 gms while silver zoomed past the Rs.1,38,000 per kg mark. Normally, in such times, demand dries up totally and there is a deluge of scrap inflows into the marketplace. However, virtually very little scrap has reached the markets in both gold and silver. On the contrary, while there is no demand for jewellery (gold or silver) or silver utensils or silver artifacts. Instead, there is enough demand seen for investment gold and silver. Is this a portent of new times for the bullion market? For, this could truly revolutionise the India bullion and jewellery markets.
Finally, the little-known Gold &Silver Club has officially raised its price target for gold to $5,000 per ounce, as a conservative base case within the current cycle. It seems that the above named club had predicted 2025 to be The Year of Gold, akin to 1979, when the yellow metal had a historic parabolic run. At the beginning of the year with gold around $2,646 per ounce many would have laughed at both the statements from the Gold & Silver Club. However, who would have imagined even in their wildest dream that gold would soar by almost 100% from its 2011, then all-time high of $1,926 per ounce fifteen Septembers ago. It is a different world now! Stay tuned in or else one will be left behind. Fasten your seat belts and get set to soar!!!