Jonathan Butler

Provided the US Federal Reserve continues on its current path of interest rate cuts, gold will benefit from lower real yields and some weakening of the US dollar. The new Trump administration’s trade and domestic growth policies are likely to be inflationary, which may support gold in the near term, but could lead the Fed having to play catch-up on rates towards the end of the year and into 2026, raising yields and eroding the generally supportive backdrop to bullion. There may be limited upside from physical investment amid the charms of surging US equities and cryptocurrencies, however central banks are likely to remain steady gold buyers as they pursue de-dollarisation of their reserves amid ongoing geopolitical fragmentation. Three most important factors for gold: 1. Rate cuts 2. US dollar 3. Tariffs

Silver is likely to appreciate relative to gold as its industrial applications benefit from the pro-growth policies of the incoming Trump administration, as well as economic stimulus measures in key markets affected by US tariffs, including China and the EU. Demand in solar photovoltaics is likely to continue to rise despite a scaling back of US environmental policies. Expansion in the electronics and chemical sectors will also help keep the market in deficit. Silver retail investment, a more widely accessible proxy for gold, could get a boost from risk- and inflation-hedging, as well as lower real yields. The conundrum of lower interest rates amid rising inflation may force a reckoning between the Fed and the Treasury, which – together with unsustainable US debt levels – could further undermine confidence in the dollar and boost USD-priced silver.

Platinum prices are likely to remain largely range-bound, as they have been in 2024, absent a major supply shock. There is likely to be further re-organisation at South African mines, which have been suffering high costs and low revenues, resulting in lower primary supplies in the longer term. The inflationary, pro-manufacturing policies of the new Trump administration are generally positive for platinum demand in the oil refining and petrochemical sectors, and there is likely to be a boost to platinum automotive demand from greater uptake of hybrid powertrains. Demand for platinum in hydrogen applications, though still promising longer term, could suffer as the new US administration focuses on conventional technologies. It may be a mixed picture elsewhere with European and Chinese industrial demand potentially slowing in the wake of trade tariffs, though still with potential for local stimulus measures to help demand.

We see modestly higher palladium prices in 2025, albeit still largely within last year’s range, with the possibility that covering of speculative short futures positioning could bring sharp temporary upside. On palladium supplies, the key swing factor is whether an end to the war in Ukraine will bring a lifting of restrictions on Russian metal flows, thus easing physical tightness in Europe and the US. Palladium supplies from South Africa are likely to be flat to lower in 2025, while we see an increase in supplies of recycled material in line with higher prices. The automotive sector should experience higher demand for palladium in ICE and hybrid powertrains, especially if support for battery electric vehicles is scaled back in the US, but the positive aspects of this may be tempered by tariff-related slowdowns in non-US markets.