Michael Hsueh

Constructive factors for gold: Stabilising investor flow and technical measures indicate a positioning correction has completed. Third quarter supply-demand data supports a continued central bank bid. The positive structural picture shows inelastic demand from central banks and ETF investment diverting supply from the jewellery market. Also, overall growth in demand outpaces supply. Three most important factors for gold in 2026: 1. Continuation of elevated pace of official demand 2. ETF flows remain positive 3. Speculative futures community may become active again, changing from lack of participation in 2025

For silver, we think the rise in the gold-silver ratio towards a multi-year high of 91 at the start of January was evidence of a pessimistic view on the impact of the possible disruption to the international trade system. Whether silver is able to find a footing and recover in relative terms to gold, we think may be a function of the overall impact to industrial demand arising from stronger US growth and inflation, weaker conditions in Europe, and China's policy support for growth centering on consumption as a top priority. Our view is that the incoming US administration will tailor economic and trade policy to promote national prosperity, and that global economic growth may be nearly as strong as last year (3.1% vs 3.2% in 2024), in which case silver is likely to recover along with gold in the second half to US$35/oz.