Gold soared to record highs earlier this year, briefly appearing unstoppable. But since April, it has stumbled, while other precious metals like platinum and silver have surged ahead. Is gold just regrouping for a comeback or facing a more permanent shift in market dynamics? Bullion analyst Sanjiv Arole reports.
Norwegian chess grandmaster Magnus Carlsen, the undisputed World No. 1, suffered two consecutive defeats against India’s R. Praggnanandhaa at the recent Las Vegas’ Freestyle Chess 2025. However, Carlson finished 3rd despite being relegated to playoffs as he defeated the same Indian grand master and others to end with a podium finish even after the earlier setbacks. Likewise, gold is in a similar predicament like the chess grandmaster. Gold had a rip-roaring start to 2025 as it scaled several peaks to scale the latest all-time of around $3,500 per ounce on April 22, 2025. The yellow metal left the rest of the precious metals far behind in its wake as it jumped by over 32% from the start of the year. However, the scenario suddenly reversed, and it seemed to turn almost upside down for gold.
Since then, gold that appeared invincible around the $3,500 per ounce mark suddenly fell off the cliff. While gold declined sharply and was left trying to consolidate its position above the $3,300-per-ounce region after even going below $3,200 per ounce (intra-day price of $3,130 per ounce) briefly, the rest of the pack simply zoomed past to scale multi-year highs.
Silver neared $40 per ounce for the first time in over a decade and more. Platinum likewise neared $1,500 per ounce after almost a decade and a half, while palladium too did not lag far behind. Platinum’s price rose by almost a whopping 64% from the start of the year. In fact, most of platinum’s gains were only since mid-June. Palladium also rose by around 42% in a similar time frame. This led many to believe that speculators were at play in the platinum and palladium markets. In contrast, both gold and silver were more subdued rising by around 30% and 32%, respectively in the same period. Can gold turn it round like Carlson and regain its top spot again? Or will it have a fight on its hand to get back to its glory days again?
One factor stands out in the global scenario around 22 April 2025 and after 15 June 2025 and even towards the end of July. All the parameters that aided gold to its all-time high levels on 22 April 2025 were very much in place even after 15 June 2025 when platinum, in particular, made its big move. The geo-political scenario was virtually the same on both those dates. In fact, most of the conditions are still very much the same. Israel continues to pound Gaza even today and this has been happening regularly ever since the 6 October attacks on Israeli civilians in 2023. The Ukraine war is showing no signs of ending ever since it began over 3 years ago. In between, Israel and Iran had a full scale long range war that USA too waded into briefly trying to knock off Iran’s nuclear program and the country’s top military, nuclear and governmental leadership in one go.
Nuclear neighbours India and Pakistan had a short but intense four-day war in the aftermath of the killing of tourists at Pahalgam. The Houthies from Yemen continued to fight against Israel after a truce with the US. On the trade front, the US reciprocal tariff continues to cast a shadow over global trade even as the US cracks deals with individual countries. In the middle of it all, the US springs a shocker like the 50% tariff on copper that left most countries jolted by the move. Stock markets continue to be volatile and the USD going up and down frequently. The US fed continues to postpone cutting interest rates till the position is clear on the inflation front. The Fed chief, Jerome Powell, firmly believes that US tariffs will impact inflation in a big way.
The moot question is: how did the price of platinum, and to some extent even palladium, zoom ahead even as both gold and silver were more subdued? One theory is that the deadline on reciprocal tariffs has probably prompted higher production of products that use platinum as well as palladium and attempts are being made to export the same into the US before the August deadline. It could have triggered a rise in PGM prices in anticipation of a good demand and widening of supply deficit in the platinum markets. Speculators may have then taken over and caused the PGM prices to soar. This price rise could well be temporary and matters would become clearer after the 1 August deadline.
In fact, gold did climb back above $3,400 per ounce briefly in the week that ended 18 July 2025 when it was announced that the base reciprocal tariff on goods imported into the US would be 15% instead of 10%. Gold even crossed $3,440 per ounce intra-day on 21 and 22 July. However, gold dived below $3,400 per ounce to near $3,350 per ounce levels and ended the week on 25 July 2025 with a high of $3,374.30 per ounce and a low of $3,323.80 per ounce. Silver too ended the week with a high of $39.24 per ounce and a low of $37.87 per ounce while the PGM prices also declined from their recent peaks. News about trade deals with the US and the subsequent volatility in all markets caused precious metals prices to decline. Probably, the 1 August 2025 deadline on reciprocal tariffs would make things clearer for all.
As far as what is in store for gold in the remaining months of 2025, Metal Focus, the London-based precious metals research outfit expects gold to be well supported through the rest of the year. They see limited downside for gold and the current economic uncertainty would support investment demand for gold. Although a full blown up trade war with the US on one side appears to have been avoided, the risk of stagnation is likely to persist.
Gold’s long term uptrend is likely to be boosted by unsustainable global debt, in particular the US government debt which is now above $37 trillion. Moreover, Trump’s new tax bills are likely to increase the deficit by nearly $4 trillion over the next 10 years. All of the above pushed the US dollar to multi-year lows. Although the USD’s role as a reserve currency is not under immediate threat, long term concerns about its stability continue to support gold. The research outfit also saw renewed inflows in exchange-traded products with June global holdings rising to their highest level since August 2022 in US dollar terms at a new all-time high end-month value of $383 billion.
Apart from that, the continued purchases of gold by central banks, expecting a fourth consecutive year of 1,000 tonnes-plus of central bank purchases, across the globe has been the main bulwark of demand for gold in the wake of high gold prices impacting jewellery demand mainly in the Asian markets. A WGC also report stated that Gold ETFs recorded an inflow of $38 billion in the first half of 2025 with their collective holdings rising by 397.1 tonnes of gold. This raised the total holdings to 3,615 tonnes by the end of June, the largest since August 2022. Their record was 3,915 tonnes in October 2020. Looking at overall global scenario coupled with Trump’s unpredictability to boot and the certainty of two rate cuts by the Fed, gold is seemingly on a solid batting wicket.
The sudden announcement by the US of 50% tariff on copper created volatility in the markets and a big spike in copper price in the futures markets. However, copper and silver have a close co-relation as around 25% of all silver supplies come as a by-product of copper. In fact, about 70-80% of global silver production comes as a by-product of mining other metals. In normal circumstances higher copper prices due to the higher tariff could appear to support greater mining activity. However, high price due to higher tariff does not necessarily mean more profits for the mining companies. As a result, no incentive to mine more copper.
On the contrary, it could curtail mining of copper in the long run. Then, higher price of copper in the longer run could push users and producers of copper products to look out for cheaper and different options to circumvent the punitive tariff on copper. This in turn could result with less of silver supply into the market and deepen he deficit in silver. The sum of this all could push the silver price beyond $40 per ounce or even into the realms of $45-50 per ounce as a long shot possibility. However, silver could still be plagued by fears of a global recession at worst or a stagnation of the US economy. Both of which could slow down silver’s charge.
Meanwhile, it has been reported in newspapers that India’s markets regulator SEBI is said to be preparing to make a drastic change in how gold and silver ETFs are to be valued. This move could alter pricing norms for one of the fastest growing segments of the country’s mutual fund industry. SEBI is said to have proposed to replace long used LBMA benchmark price of the gold industry. The proposal is to shift to local benchmarks in order to boost transparency and standardise NAVs.
This has been a long-standing demand of the industry and players on the commodity exchanges. Some experts have warned that the move could bring new risks due to unreliable and inconsistent methods. Others believe that this could usher in an all India price for gold and silver and an India fix. They feel that for too long India has been a ‘price taker’ and this move could benefit the Indian bullion industry. But will this change the fact that for an India price, the starting point would still be the LBMA (am or pm) fix?
Over the years, we have seen the growth of the Shanghai Exchange, the Singapore Exchange as well as the Dubai Commodity Exchange. And last but not least, the New York Commodity Exchange has always been omnipresent. In spite of that, the LBMA fix is still the benchmark for bullion prices in the world. Can the Indian pricing replace the importance of the LBMA fix? Not likely for the near future at least. At best, SEBI’s move could provide arbitration opportunities for its members.
Finally, India signed the FTA with UK amidst great fanfare. As far as the gems and jewellery sector is concerned, the tariff on export of jewellery to UK is reduced to zero from the current 2-5% under the CETA agreement. Under the CETA with UK, silver imports into India are to be reduced to zero over the next ten years at 0.6% per year. Currently, the normal import duty on silver is 6% and it will be 5.4% under the CETA agreement. Ironically, the current import duty on dore is 5.35%, just 0.05% less than the 5.4% under CETA. Is that the end of the road for Indian bullion refiners? Then, after the CEPA with UAE, gold has been left out of subsequent FTAs agreed by India with other countries. What will be in store for the gem and jewellery sector in FTA agreements with the US and EU? Only time will tell.