Suki Cooper

We expect gold to set fresh record highs. The structural factors driving strong investment demand remain intact. These include heightened geopolitical risk, concerns around Fed independence, rising US debt, ongoing trade uncertainty, de-dollarisation concerns and currency debasement. The two key drivers providing downside support and buoying the upward momentum remain intact: (1) ETP flows of more than 750 tonnes in 2025 were the strongest since the record inflows in 2020 (in tonnage terms), while AUM in tonnage and value terms has scaled record highs. Flows have been cautious in January but remain positive. (2) Central bank buying accelerated rather than eased in Q4-2026 despite record prices, with appetite emerging from previously dormant central banks. Gold’s response to escalating geopolitical tensions and concerns over Fed independence underscore that structural drivers remain pivotal. A key risk to watch is central banks’ and portfolio managers’ gold allocation targets beyond the commodity futures indices that are rebalanced in January. Anecdotally, family offices still appear to be below their target allocation, with allocations estimated at 1-2% versus 5-10% targets. A more benign macro backdrop or Fed monetary policy intervention could also derail gold’s rally. Gold’s correlation with traditional macro drivers has softened, thus our expectations for the Fed to remain on hold and the USD to strengthen are only likely to moderately temper gold’s rally. Investors are still turning to gold as a safe haven, particularly given heightened market and geopolitical uncertainty. Gold’s floor will become softer if central bank buying and portfolio allocation slow.

Key takeaway: Concerns over physical supply tightness The silver market has tightened rapidly and is set to remain undersupplied in 2026. Historically, an abundance of above-ground stock has been readily available to fill the gaps. However, over the past year, concerns around metal availability, tariffs and trade tensions have resulted in elevated country-level stockpiles, reducing physical market liquidity. Near-term, market focus rests on the S232 critical minerals report and the U.S. Supreme Court ruling on the legality of the tariffs. Clarity that there will be no further tariffs or trade restrictions should result in US stocks normalising and easing physical market liquidity; however, risks that US stocks will remain elevated linger. Similar concerns around export limitations in China have further tightened the market. Two key factors to watch beyond tariffs are: (1) investor appetite, with ETP holdings surging last year to exceed 4.5kt and retail demand remaining strong; and (2) scope for demand substitution. Limited instant opportunities exist, but the doubling of prices is likely to incentivise innovation projects longer term. Silver mine supply growth remains limited given that silver is a by-product, and recycling is restricted given growing usage in the PV sector where recycling has not been developed efficiently. The gold-silver ratio has dipped below the long run average of 65, suggesting that silver is now overvalued relative to gold. Lack of physical market availability is likely to keep silver prices elevated but we caution that prices are set to remain volatile and could reverse quickly.

Despite setting fresh record highs in 2025, we believe there is still scope for further upside in platinum given tight supply and demand dynamics. We are forecasting a market deficit for the fourth consecutive year. The three key factors to watch, in our view, are: (1) the newly launched futures contract on the Guangzhou Futures Exchange (GFEX); (2) China’s jewellery market and platinum stocks; and (3) ETP and investor flows. Similar to the rest of the complex, elevated regional stock levels have tightened the physical market and ETP demand has continued to rise, with holdings stabilising above 3Moz. But aside from the S232 critical minerals review, the key focus in the near term is appetite on the GFEX, which so far has surpassed market expectations. Meanwhile, China’s jewellery demand has slowed recently. Slower penetration of battery electric vehicles (BEVs) has been supportive for auto-catalysts that contain PGMs; but given platinum prices, risks remain of a switch in PGM loadings (although not imminent). On the supply side, underinvestment in recent years amid low prices means there is limited scope for production growth. The PGM basket price has rallied but the supply response is not instant.

Palladium supply and demand dynamics are more balanced relative to the rest of the complex. However, similar drivers apply to palladium: appetite for futures on the GFEX, the S232 review and stock builds across regions have tightened the market. A factor unique to palladium is the ongoing ‘dumping’ investigation into palladium shipments from Russia to the U.S. Trade restrictions or sanctions could tighten the market further or result in regional variations in premiums. Scrap supply has picked up, but not sufficiently to swing the market to a deep surplus. The limited response to elevated prices suggests limited stockpiles. A reversal of the platinum-palladium substitution that began in 2021 could slow palladium’s return to a surplus. Further, the lofty short positions which have weighed on the market over the past three years have now largely been covered and tactical positioning is close to neutral, suggesting fundamentals are once again in the driver’s seat. We expect an eventual shift to a market surplus which is likely to temper palladium’s rally.