【MACRO Alert】 Global turbulence - a stabilizer or a source of pressure for the precious metals marke

In the global financial arena, gold and silver are not only precious metals, but also a barometer of global economic sentiment. In 2024, the two markets experienced dramatic fluctuations, with gold hitting a record high, while silver became a bright spot in the commodity market with its unique industrial and investment attributes. As the clock of 2025 approaches, investors and analysts are keeping a close eye on every economic and political development on the horizon, trying to get a glimpse of the future trend of gold and silver prices.

Gold prices could experience a sharp downward correction if geopolitical tensions in the Middle East are eased and the Russia-Ukraine conflict is resolved. Trump's "America First" policy could lead to less focus on international affairs, reducing demand for gold as a safe-haven asset. In addition, the Fed's hawkish policy bias could weigh on gold prices, especially given the lack of progress on anti-inflation measures. Trump's move to raise tariffs could heighten uncertainty about the inflation outlook and affect policymakers' interest rate decisions.

The continued easing policies of major central banks around the world could push gold prices higher in 2025. China has said it will adopt a "moderately loose" monetary policy next year and implement a more proactive fiscal policy, which could have a positive impact on the gold market. In addition, further escalation of geopolitical concerns could increase gold's safe-haven demand, especially if the conflict in the Middle East expands or the conflict between Russia and Ukraine continues.

Central bank buying became an important catalyst for the gold market in 2024. The World Gold Council noted in its 2025 Gold Outlook that central bank buying will continue to have a positive impact on gold prices. Although it is difficult to predict a long-term trend of central bank demand exceeding 500 tons, any deceleration below this level could put additional pressure on the gold market.

Silver, which is below gold , has become a star investment target in the commodity market this year. TD Securities expects silver to surpass gold again in 2025 and become the best performing metal. Strong growth in the US and Chinese economies is expected to stimulate demand for silver and tighten the already undersupplied market. Analysts expect the silver market to face tight supply as demand in Asia recovers, with an average price of $36 per ounce expected in the last few months of next year.

The policies of the new Trump administration, especially its commitment to the Inflation Reduction Act, climate policy, and tariffs, will be key factors affecting silver's performance. The Fed's rate-cutting cycle and ETF buying activity could accelerate the depletion of existing silver stocks. In addition, the growth in solar demand provides fundamental support for silver prices, and while the Trump administration may be unfavorable to the growth of domestic solar capacity, other parts of the world are still adding capacity.

TD Securities believes that even though silver prices are at multi-year highs, market prices have not yet reached a level where any pressure release valves are flooding into the market. The current situation requires higher prices to release inventories from unconventional sources, making silver the most convex trade in the commodity market. Analysts expect silver to significantly outperform gold in the future.

TD Securities' detailed silver price forecast for 2025 shows spot silver trading at $33.25 per ounce in the first quarter, $33 in the second quarter, $34 in the third quarter, and peaking at $36 per ounce in the fourth quarter. For 2026, TD Securities' outlook is even more optimistic, predicting silver will trade between $38 and $39 per ounce.

The gold and silver markets in 2025 will be full of uncertainty, but also pregnant with great opportunities. Geopolitical developments, the direction of global monetary policy, and the needs of central banks will have a profound impact on both markets. Investors need to pay close attention to these factors to grasp market dynamics and make wise investment decisions.