In H1, precious metal prices surged strongly before hovering at highs. Overall, the price movements can be divided into three phases, each corresponding to macro policy shifts. First, early this year, prices fluctuated upward until April, when the US "reciprocal tariff" policy triggered a rapid correction. Second, after a brief panic-driven sell-off, gold's appeal as a core safe-haven and inflation-hedge asset was reassessed, with losses fully recovered within days and new highs reached. Silver, however, struggled to rebound due to weak industrial demand prospects. Third, from late April to present, despite ongoing geopolitical tensions, gold prices attempted two rallies amid unexpectedly easing US-China tariff disputes and the US Fed's cautious stance, though neither broke previous highs, maintaining a fluctuating trend at highs. Silver, meanwhile, saw catch-up gains driven by improving industrial demand expectations and gold/silver ratio corrections.
In H1, the gold/silver ratio first rose then fell. Early April, Trump's "reciprocal tariff" policy sharply heightened US stagflation fears, amplifying global economic uncertainty and supply chain risks. Gold demand surged as a traditional safe haven, while silver's industrial attributes suffered, pushing the ratio above 100 for nearly two months. As "trade war" fears eased, pessimism over global industrial production and trade was revised, US inflation cooled, and the ratio corrected with silver's catch-up rally.
In H2, expectations for weaker US growth, clearer US Fed interest rate cuts, and a sustained weak US dollar index create a supportive macro environment for precious metals. US growth has slowed notably this year, with high rates curbing corporate and household demand, cementing a downturn. The dollar's downtrend, still ongoing, further supports gold prices.
Gold will continue benefiting from elevated uncertainty—trade friction, US Fed policy, and geopolitics will sustain its safe-haven appeal. Central bank and investment demand ensures stable consumption, reinforcing medium and long-term upside. Prices will rise further on safe-haven and physical demand.
Geopolitical risks structurally elevate gold's appeal. Global tensions persist in 2025: the Russia-Ukraine stalemate, unstable European security, Middle East volatility (especially Persian Gulf and Red Sea routes), and rising Asian friction. These drive safe-haven allocations. Given limited near-term resolution, gold's geopolitical premium will endure, spiking during escalations.
Silver will face a 4,000 mt supply-demand gap in 2025, but high inventories will limit its upside. H1 supply growth slowed due to base effects and fewer new mine projects, with full-year supply projected to rise 2% YoY. Weak manufacturing and slowing PV sector growth may drag industrial demand down ~1% YoY.
In H2, precious metals retain upside potential but with pronounced volatility. US downturn, US Fed rate cuts, safe-haven demand, and central bank buying propel gold, though pace may fluctuate. COMEX gold is forecast at $3,200–$3,600/oz, SHFE gold at 730–840 yuan/g. Silver prices, more elastic amid liquidity easing, face headwinds from weak US growth and commodity drags, relying on rising gold prices and corrections of high gold/silver price ratio. COMEX silver may trade at $32–$38/oz, SHFE silver at 7,900–9,500 yuan/kg.
Author of this Chinese article: Jinrui Futures
Please note that this news is sourced from https://www.cnmn.com.cn/ShowNews1.aspx?id=463822 and translated by SMM.
