Precious metals pause after record highs

Gold and silver ended last week on a softer note after notching fresh record highs earlier in the week. The setback came as risk appetite improved across broader markets, particularly in the United States where a brief flare-up in regional banking stress faded as quickly as it appeared.

Gold reached a new milestone at USD 4,380 per ounce before easing, while silver briefly traded at USD 54.48 and platinum touched USD 1,733. The pullback on Friday reflected short-term profit-taking rather than any fundamental shift in sentiment. Each metal remains in powerful uptrends that have carried them higher by between 60 and 80 percent year-to-date.

The liquidity factor: why corrections hit silver and platinum hardest

Price action once again underlined the importance of liquidity differences across the complex. Silver’s liquidity is roughly nine times lower than gold’s, while platinum’s market depth is much smaller still. These disparities magnify both rallies and corrections: a surge in buying quickly runs into limited supply, and any shift toward profit-taking produces outsized percentage moves.

Friday’s seven-percent top to bottom decline in silver erased just two days of prior gains, leaving spot prices comfortably above USD 50. Even so, it demonstrated how thin liquidity can amplify routine market noise into sharp moves. The same principle applies in platinum, where a relatively small order flow can push prices which since Friday helped trigger a 9.5% top to bottom tumble.

Gold: a pause, not a reversal

Gold’s rally since late August remains the key anchor for precious metals. A breakout from months of consolidation propelled prices to record highs. While short-term momentum looks stretched, underlying demand remains solid. A pullback of USD 200–300 would mark a normal correction, not a reversal, with the USD 4,000–4,100 zone likely to attract fresh buying.

The fundamental backdrop remains dominated by the same themes that propelled gold through successive record highs: a waning confidence in the old financial order leading to persistent central-bank accumulation, renewed demand for ETFs from investors in the West on top of continued demand from Chinese households seeking alternatives amid a four-year long property market slump,  a fourth year demand, and a gradual erosion of trust in fiat and fiscal management in the West. For decades, investors treated U.S. Treasuries as the global risk-free benchmark. Today, the market’s message is subtler: “risk-free” and “trust-free” are no longer synonymous.

Silver: volatility meets event risk

After climbing nearly 40 percent since its late-August breakout, silver finally succumbed to profit-taking. Friday’s decline lifted the gold–silver ratio back to 82 from 78 earlier in the week, a reminder of how quickly relative value can shift when liquidity thins. Technical support is found near USD 49.4, the initial Fibonacci retracement from the August–October advance, followed by a broader support shelf around USD 48.

Market attention is now squarely on the pending outcome of the U.S. Section 232 investigation into imports of critical minerals, including silver, platinum, and palladium. The decision could reshape short-term supply chains and pricing structures on both sides of the Atlantic.

A no-tariff outcome would ease existing tightness in the London market by allowing greater movement of U.S.-held metal to Europe. That, in turn, would narrow the recent London-over-COMEX premium that reached pandemic-era extremes in recent weeks and bring one-month lease rates back toward normal levels.

A tariff announcement, by contrast, would have the opposite effect. Metal already inside the United States would effectively become semi-stranded, intensifying tightness in London and driving COMEX premiums higher. Under such a scenario, silver could quickly retest and potentially exceed recent highs, fueled by renewed squeeze dynamics rather than incremental demand growth.

Traders are therefore treating Section 232 as a binary event with asymmetric outcomes. Either scenario offers opportunities, but position sizing will be critical given silver’s inherently thin liquidity and tendency toward exaggerated moves.

Platinum: thin markets, wide moves

Platinum’s surge to USD 1,733 mirrored silver’s momentum, with both metals supported by a tightening supply outlook and a notable pickup in investment demand through ETFs. Supply disruptions and substitution flows from over-extended gold buyers have reinforced the rally in platinum, narrowing the gold-platinum ratio to 2.68 from April’s record high at 3.6.

Yet with platinum still trading almost USD 2,700 below gold—down from parity a decade ago—the white metal is likely to continue benefiting from gold’s tailwind. Constructive long-term fundamentals add support: chronic South African power shortages continue to restrict supply growth, ensuring a prolonged drawdown in above-ground inventories amid solid demand from the auto sector, jewellery makers, emerging technologies, and increasingly from financial investors through ETFs and futures. However, platinum remains by far the least liquid of the three major precious metals, leaving price discovery prone to sporadic order flow around macro headlines and currency swings.

Asia’s demand pulse may cool as Diwali begins

The start of the Diwali festival marks a seasonal turning point for precious-metals demand in Asia. Buying typically slows during the holiday itself before resuming later in the quarter. This year, silver demand in India has been exceptionally strong as retail buyers substituted away from expensive gold. A pause in this flow could ease some of the immediate tightness visible in recent lease-rate spikes.

China’s role remains more structural. With its property market still weak, households continue to treat gold as a store of value rather than a trading asset. Because imported gold cannot be freely re-exported, each ton that enters the country effectively reduces available global supply—a one-way flow that has reinforced gold’s resilience even during global risk-on phases.

Technical perspective: stretched but not overcrowded

From a chart perspective, the rally across the complex has produced momentum readings rarely seen in recent decades, yet the absence of heavy speculative positioning suggests the market remains under-owned rather than overcrowded.

For gold, the recent surge to a record has removed what was left in terms of technical resistance levels, instead leaving the market focusing on USD 4,500 as the next major psychological level while support remains a wide band around USD 4,000, not least USD 3,972 which represents the 38.2% Fibonacci retracement of the August to October surge. 

Structural demand still intact

Beyond near-term volatility, the broader narrative remains one of sustained structural demand. Central banks, spooked by sanctions, fiscal deficits, and the weaponisation of currencies have remained strong buyers since 2022, with emerging-market institutions leading the charge. ETF holdings meanwhile have risen in tandem, confirming renewed appetite from both retail and institutional investors seeking tangible assets outside the financial system. In gold alone, investors primarily in the west have now bought more in 2025 than they sold in the previous three years.

This “trust hedge” dynamic—born out of fiscal strain, geopolitical fragmentation, and the weaponization of currencies—has decoupled gold from traditional macro correlations. The once-reliable inverse relationship between real yields and bullion prices has weakened, underscoring how new drivers now dominate.

In the near term, traders will continue to look over the shoulder, as they did on Friday, for potential trouble amid a market in need of a correction or at a minimum a period of consolidation. A healthy development that will allow potential buyers who missed the train to get onboard, while also testing the underlying demand should a correction trigger long liquidation from short-term and technical focused hedge funds. However, the current strength of the underlying bid, coupled with tight physical markets and central-bank accumulation, points to a consolidation instead of a deep or lasting correction.

Key variables over the coming weeks will be:

• The Section 232 outcome, which will determine the direction of trade flows between the U.S. and Europe.
• Post-Diwali Asian demand, especially from India’s silver buyers.
• ETF and central-bank flows, which will confirm whether institutional demand remains steady during price pauses.
• The behavior of U.S. real yields and the dollar, whose influence, though diminished, still matters at the margin.

The broader message is unchanged: this remains a structural bull market for tangible assets, driven by a re-pricing of trust in global finance. The pause now unfolding is less a sign of exhaustion than a reminder that even parabolic trends need to breathe.