Precious metals are on a tear! Gold 4500, platinum 2300, silver 72, all reaching record highs

# Precious Metals Continue Their Frenetic Rally

Driven by a confluence of geopolitical risks, persistent global supply shortages, and robust investment demand, the prices of gold, silver, and platinum have once again surged to all-time highs.

Spot gold has broken through the $4,500 per ounce mark for the first time in history, surging more than two-thirds year-to-date and on track to post its best annual performance since 1979.

Platinum prices have also soared to a record high above $2,300 per ounce. The metal has extended its winning streak to 10 consecutive trading days, marking the longest rally since 2017. With a year-to-date gain exceeding 150%, it is poised to register its strongest annual performance since Bloomberg began tracking the data in 1987.

Spot silver has similarly enjoyed a spectacular rally, with its upward momentum remaining strong after breaking the $70 threshold.

This spectacular price surge is rapidly rippling through global markets. Following the opening of China's commodity futures market, the benchmark platinum futures contract hit the daily trading limit. Meanwhile, Shanghai silver futures and palladium futures both surged by more than 6%.

## Gold: Safe-Haven Demand Resonates with "Currency Debasement Trade"

Gold's strong performance this year stems from a combination of factors. Beyond geopolitical risks as a direct catalyst, the deeper drivers lie in macroeconomic and policy shifts.

According to data from the World Gold Council, sustained and substantial purchases by central banks around the world have laid a solid foundation for this bull market. Meanwhile, capital has been flowing steadily into gold ETFs: global gold ETF holdings have risen every month this year except May. Among them, holdings in the SPDR Gold Trust—the world's largest precious metals ETF operated by State Street Global Advisors—have climbed more than one-fifth so far this year.

Analysts note that aggressive measures taken by U.S. President Donald Trump earlier this year to reshape the global trade system, along with his challenges to the Federal Reserve's independence, have further fueled the gold price rally. Additionally, investors are actively engaging in the so-called "currency debasement trade": concerns that ballooning global debt levels will erode the long-term value of sovereign bonds and their respective fiat currencies have driven them to turn to hard assets such as gold.

Notably, the chief economist at Muthoot Fincorp pointed out that the capital flowing into gold ETFs in recent months has mainly come from retail investors, whose holdings exhibit low stickiness. This may imply that gold price volatility will remain elevated. Nevertheless, multiple institutions remain bullish on gold's outlook. Goldman Sachs predicts that gold prices will reach $4,900 per ounce under its 2026 baseline scenario, and believes there are significant upside risks.

## Platinum: Price Surge Amid Supply Bottlenecks and Trade Risks

Unlike gold's safe-haven appeal, platinum's current rally is largely attributed to its own tight supply-demand fundamentals and potential trade policy risks.

According to Bloomberg reports, due to supply disruptions in South Africa—the metal's top producer—the platinum market is heading for its third consecutive year of supply deficit in 2025. Meanwhile, high borrowing costs have prompted industrial users to prefer leasing platinum rather than purchasing it outright, further tightening spot market supplies. Platinum is widely used in the automotive and jewelry industries, as well as in the production of chemicals, glass, and laboratory equipment.

Trade risks represent another key variable. The market is closely monitoring the outcome of the U.S. Section 232 investigation, which could lead to the imposition of tariffs or trade restrictions on platinum. To hedge against this risk, traders have stockpiled over 600,000 ounces of platinum in U.S. warehouses, a volume far exceeding normal levels.

On the demand side, platinum shipments to China have remained robust this year. Recently launched platinum futures contracts on the Guangzhou Futures Exchange have been trading at a significant premium over other international benchmarks, further boosting market optimism over demand prospects.

## Silver: Structural Shortage Amid Intertwined Industrial and Investment Demand

Silver has also delivered eye-catching performance amid the broad-based precious metals rally, with its price gains driven by a dual impetus from both investment and industrial demand.

From an investment perspective, holdings in global silver ETFs have continued to climb. In major consumer countries such as India, buyers have ramped up silver imports, spurred by Diwali, the Hindu festival of lights. This wave of demand even caused a supply squeeze in the London benchmark market at one point.

From an industrial standpoint, silver is deeply embedded in global supply chains, with widespread applications in electronic products, solar panels, and medical device coatings. According to data from the Silver Institute, a global industry association, global silver demand has exceeded mine production for five consecutive years, forming a structural shortage pattern.

Similar to platinum, silver also faces risks of potential trade barriers. Traders are awaiting the U.S. Department of Commerce's investigation results on whether imports of critical minerals pose a threat to national security—a decision that could trigger the imposition of tariffs on silver.

**Source**: Wall Street CN

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