Central banks go for gold, investors still see value in silver, platinum may consolidate after rapid price rise – Heraeus
While gold hasn’t been making strong gains since its April highs, sovereign demand is providing plenty of support at these price levels, and while EFT flows show investors see further gains for silver, platinum may have topped out in the near term, according to precious metals analysts at Heraeus.
In their latest precious metals update, the analysts noted that central banks continue to provide a solid floor for gold demand.
“In May 2025, central banks added a net 20 tonnes of gold to their reserves, with Kazakhstan, Turkey and Poland leading the purchases,” they wrote. “Despite a slight moderation in pace, sentiment remains strongly bullish – 95% of surveyed central banks expect global gold holdings to rise, and 43% plan to increase their own reserves, a record high. This reflects a structural shift in reserve management, with growing diversification away from the US dollar and heightened demand for gold as a hedge against geopolitical and inflationary risks.”
Central banks have added over 1,000 tonnes of bullion to their reserves in each of the last three years, which is far above the long-term average. “This is likely to have been a driver of the gold price, even as correlations with other assets have broken down,” the analysts said. “For example, gold and the US Treasury 10-year bond yield were strongly negatively correlated until central banks began to ramp up purchases. Over the last 18 months, yields have largely traded between 3.5% and 5.0%, while the gold price has risen from $2,000/oz to ~$3,400/oz.”
“Ongoing central bank gold buying is expected to continue to underpin gold price performance through the remainder of 2025, providing emerging market banks continue to favour gold over other assets,” they said.
After dipping briefly below support at $3,300 earlier this morning, spot gold is staging a modest recovery on Monday, last trading at $3,320.89 per ounce for a loss of 0.47% on the session.
Turning to silver, Heraeus analysts said the numbers show that investors continue to see value in silver.
“Net ETF inflows of 990 tonnes have been made since the beginning of June to date (4 July),” they said. “Most of the inflows came from the price rallying in the first half of the month (+509 tonnes), followed by more opportunistic buying and selling as the silver price stabilised above $36/oz in the second half of the month and beginning of July. Since 14 June, net inflows have amounted to an additional 426 tonnes. In total, this accelerated investor interest over the last month or so has accounted for more than 50% of year-to-date net inflows into silver ETFs. This has helped to propel holdings to the highest level since August 2022, at more than 24,000 tonnes of metal.”
The analysts noted that as of Friday’s close, silver ETF holdings are valued at $28.5 billion. “Silver remains historically undervalued versus gold (Au:Ag = 90.3),” they said. “Should the silver price continue to appreciate, ETF inflows may continue, as investors, betting that the ratio will revert towards the 10-year average of 80.2, rejoin the trade.”
Spot silver set a new high weekly close of $36.91 per ounce last week before falling along with gold earlier on Monday, but after multiple tests of the session low around $36.170 held, prices have moved back into the middle of their daily range. At the time of writing, spot silver last traded at $36.665 per ounce and is down 0.73% on the daily chart.
And on the platinum front, Heraeus wrote that producers are looking to reduce their costs to increase profitability.
“Last week, Impala Platinum announced the official consolidation of the Impala and the Royal Bafokeng Platinum (RBP) operations in South Africa, following Impala’s acquisition of RBP in 2023,” they said. “The aim of the consolidation is to realise the synergies of the two contiguous operations, and lower unit costs across both. In CYH2’24, RBP shafts together were profitable, having successfully reduced costs by 2% year-on-year thanks to cost controls and labour restructuring efforts. Likewise, lower average labour costs at Impala helped to control costs, though mining inflation brought total costs up year-on-year.”
“Given the contiguous nature of the Impala Lease Area and the Bafokeng lease, there is scope for costs to be reduced beyond overheads,” the analysts said. “It is feasible that accessing the underground ore from a more optimal shaft and optimal ore blending at the concentrating stage could have a positive impact on costs. The recent rise in the South African basket price will also be helping the country’s PGM producers’ bottom lines in the short term and ease pressure on the highest-cost operations.”
They pointed out that platinum rose for a fifth straight week and saw the highest weekly close of the current rally at $1,394 per ounce. “Price action was choppy, swinging up to $50/oz intraday during the week,” the analysts noted. “The daily RSI is showing increasing divergence from the price, and after such a rapid rise a more prolonged period of consolidation is possible.”
After hitting a session low of $1,341.94 just before 3 am EDT, spot platinum is also recovering along with the broader precious metals complex, though it has significantly more ground to make up.
Spot platinum last traded at $1,363.53 per ounce for a loss of 2.20% on the session.
Source: https://www.kitco.com/