It is expected that the trend of Silver in 2025 will roughly follow the trend of Gold.
According to Zhito Finance APP, MetalsFocus has released a weekly report on Precious Metals, forecasting the Precious Metals market in 2025. The team indicated that after a significant rise in 2024, gold prices are expected to continue rising in 2025, potentially reaching a peak of 3,000 USD/ounce. Essentially, this reflects the numerous macroeconomic and geopolitical uncertainties that will prompt institutional investors to actively acquire defensive Assets. Strong global official sector buying of Gold will also support gold price increases. It is expected that the trend for Silver in 2025 will generally follow that of gold. Despite strong silver demand in the industrial sector, the structural supply shortage will remain high, but investor caution towards going long on Industrial Metals will be a major adverse factor hindering silver prices from significantly outperforming gold. Finally, it is expected that the prices of Platinum, Palladium, and Rhodium will show a range of fluctuations in 2025.
Gold
At the beginning of 2025, gold prices will fluctuate narrowly within the range of 2,600-2,650 USD/ounce. Given the substantial increase in gold prices in 2024, a period of consolidation is reasonable. Additionally, some traditionally influential factors on gold prices appear to be Bearish: the market generally expects fewer interest rate cuts than previously anticipated in 2025, and recent U.S. Treasury yields and the USD continue to rise.
Looking ahead, the slowing pace of interest rate cuts and the strong USD will remain major obstacles to gold price increases in the short term. However, despite these adverse factors, other recent macroeconomic conditions are still Bullish for gold, which should help push gold prices to challenge the 3,000 USD/ounce mark.
Concerns over the excessively high levels of U.S. government debt will prompt more investors to create diversified investment portfolios.
Given that government fiscal expansion during Trump's second term is likely to be more aggressive, these concerns are intensifying. The excessive government debt will also lead to uncertainty regarding the long-term impact on U.S. Treasury bonds and inflation rates. The uncertainty regarding China's economic outlook and the potential pressure on the Renminbi may also prompt Chinese investors to turn to defensive Assets.
Gold prices and USD.
Data source: Bloomberg.
Moreover, even if the USA slows the pace of interest rate cuts in 2025, the market generally believes that there will be rate cuts within the year. The combination of lower policy rates and persistent inflation will lead to lower real interest rates in the future. Finally, the geopolitical tensions in the Middle East are unlikely to dissipate quickly, and Trump’s radical tariff plan will bring even greater uncertainty. In summary, during 2025, the above factors will continue to drive investors to consider Gold and other defensive Assets as investment symbols.
At the same time, the global official sector's increased Shareholding in Gold in 2025 is expected to continue providing strong support for gold prices. Since 2022, the demand for Gold from central banks around the world has been extremely strong, often providing solid support for gold's bottom price. The reasons include geopolitical risks, concerns about the sustainability of USA government debt, and the remarkable performance of gold prices in recent years, which have all enhanced Gold's attractiveness as a diversification tool in an effective investment portfolio. It is expected that these factors will continue to play a driving role, especially considering that Trump's proposed trade policies are likely to accelerate the process of de-dollarization.
However, it should be noted that once it tests 3,000 USD/ounce, gold prices will struggle to sustain further upward momentum. By the late 2025, many of the bullish factors mentioned above will have already been reflected in gold prices, and the crowded nature of long gold trades may be high, while crisis fatigue will also become a negative factor. Therefore, it is expected that gold prices will start to decline in the second half of 2025. However, due to numerous macroeconomic and geopolitical uncertainties, gold prices will still remain at relatively high levels.
Gold and Silver price ratio.
Data source: Bloomberg.
Silver.
In 2024, the silver market will see a structural supply shortage for the fourth consecutive year, and the amount is quite large. The silver demand from the industrial sector is strong, while the silver supply remains stable, supporting the bullish fundamentals of silver. However, due to the abundant inventory of above-ground silver, there has been no tight supply situation for physical silver, and the robust conditions of the physical silver market have little effect on driving up silver prices.
Compared to the fundamentals, the primary drivers of silver price movements are the economic factors that affect gold prices. Many investors view investing in silver as a leveraged way to speculate on gold. Throughout most periods in 2024, the gold/silver price ratio will fluctuate within the range of 80:1 to 90:1, which has existed since 2022, serving as clear evidence.
Looking ahead, many factors previously discussed regarding gold are also expected to benefit silver, potentially pushing silver prices up to around 35 dollars per ounce in the first half of 2025. However, even though industrial demand for silver remains strong, concerns that the Trump administration may raise tariffs could impact global economic growth, affecting investors' enthusiasm for bullish positions in Industrial Metals. This will remain a significant adverse factor hindering silver prices from significantly outperforming gold prices in the coming months.
Silver market supply and demand balance.
Data source: Metals Focus.
Once the upward momentum of Gold prices exhausts in the second half of 2025, Silver prices will also come under pressure. On a positive note, the strong fundamental supply and demand dynamics for Silver are expected to limit its downside potential. Despite uncertainties surrounding the economic and trade policies of the Trump administration, structural bullish factors should continue to drive Silver demand in the industrial sector in 2025, with demand remaining greater than supply. As the above-ground stock of Silver continues to decline, the strong fundamental influences of Silver may begin to become prominent at some point.
Platinum
In 2024, the supply shortage of Platinum is 0.515 million ounces, marking the second consecutive year of supply shortage in the past nine years. However, the average annual price of Platinum still fell by 1% to 956 USD/ounce, which is close to the average prices in 2022 and 2023 (961 and 965 USD/ounce, respectively). The price of Platinum is expected to show a self-reinforcing range-bound trend, although a third consecutive year of supply shortage (amounting to 0.299 million ounces) is forecasted for physical Platinum in 2025, the price may still be unable to escape the range-bound trend.
Platinum's supply has shifted from surplus (with a supply surplus of over 1 million ounces in 2021, reaching a peak) to shortage, primarily due to a sharp decline in both mined Platinum supply and recycled Platinum supply (the reasons behind this include a significant drop in the prices of a basket of Platinum group metals and the disruption of the supply chain related to automotive catalytic converters), and an increasing substitution of Palladium with Platinum in automotive catalysts. The supply-demand gap for Platinum is expected to narrow in 2025. Ongoing profit margin pressures on mining companies are expected to lead to a further 2% decline in mined Platinum supply. However, recycled Platinum supply is expected to rebound by 12% year-on-year due to alleviation of supply chain issues (still 16% lower than the peak levels in 2021). Total demand for Platinum is expected to decline by 2% in 2025, mainly due to the cyclical expansion of LCD production capacity in China in 2024 not continuing into the new year, leading to a decrease of 0.385 million ounces in the Platinum demand from the Glass industry. In contrast, the demand for Platinum in the automotive and jewelry industries is expected to grow moderately by 2%.
The balance of supply and demand in the Platinum group market relative to demand share.
Data source: Metals Focus.
In recent years, our analysis of Platinum price trends has remained largely unchanged. Given that Platinum demand exceeds supply, we are optimistic about the long-term outlook for Platinum prices. However, due to the enormous above-ground Platinum stocks, the impact of short-term supply constraints on boosting Platinum prices is not pronounced. It is expected that in 2025, investors may still Buy Platinum at prices around 900-950 USD/ounce or even below 900 USD/ounce, and Sell near 950-1,000 USD/ounce. At the same time, Chinese importers may continue to seize the opportunity of falling Platinum prices to participate in the market. Therefore, we expect Platinum prices in 2025 to maintain a range-bound trend.
Palladium
The average price of Palladium in 2024 fell by 26% year-on-year, with a cumulative annual decline of 59% since 2021. Despite a decrease in the annual physical Palladium supply shortage, it remains high at 0.815 million ounces; however, the Palladium price continues to drop. Since the above-ground stock of Palladium is sufficient to meet about a year's demand, the supply shortage has a limited impact on the market. The main reason is that, in the long run, the electrification of Autos is unstoppable, leading the market to anticipate a decline in Palladium demand from the automotive industry, and investors remain strongly Bearish on Palladium. The average net short position of Palladium Futures held by management Funds during 2024 reached 1 million ounces, reflecting this Bearish sentiment. It is expected that the Palladium supply shortage will further narrow to 0.399 million ounces in 2025, although a reduction in investor sell-offs is expected to provide slight support for the Palladium price.
Platinum group mine supply and recovery supply volume.
Data source: Metals Focus.
The reason the supply-demand gap for Palladium will narrow in 2025 is primarily due to a 3% expected decrease in Palladium demand from the automotive industry, driven by an increase in global electric vehicle market share from 12% to 15% throughout the year, leading to a decline in light internal combustion engine vehicle production. It is expected that a continuous decline in the prices of a basket of Platinum group metals will prompt mining companies to implement cost-cutting measures (for instance, Palladium production at the US mine operated by Sibanye-Stillwater is expected to decrease by 0.2 million ounces in 2025), resulting in a 4% decline in mined Palladium supply. In contrast, Palladium recovery supply is expected to grow by 13% due to alleviation of supply chain issues for automotive exhaust catalysts.
Given the slight shortage of physical Platinum supply, the release of inventory by vehicle manufacturers, and the saturation of short positions, Palladium prices are expected to stabilize in 2025. If expectations for mined Palladium supply or recovery supply are further downgraded, it may boost Palladium prices, while the market also remains susceptible to further fluctuations.Short SqueezeThe impact.
Rhodium
Similar to Palladium, although the rhodium supply shortage in 2024 reached a new high in our data series starting from 2010, the average rhodium price throughout the year dropped 30% year-on-year to $4,637/ounce. After years of high volatility, rhodium prices in 2024 showed relatively stable performance, fluctuating moderately within the range of $4,325 to $4,825 per ounce, with a difference of $500 between the upper and lower limits. In contrast, from 2020 to 2021, the monthly price fluctuations of rhodium often exceeded this range.
It is expected that the rhodium supply shortage in 2025 will narrow to 0.027 million ounces. Similar to Platinum and Palladium, the narrowing of the rhodium supply-demand gap is attributed to the continuous decline in rhodium demand from the automotive industry, the increase in scrap vehicle catalytic converter recycling supply, and reduced rhodium demand from the glass industry after periodic capacity expansion in 2024. Unlike Palladium, the significant expansion of capacity in the rhodium-using industrial sector is unlikely to recur in 2025, leading to a substantial decline in chemical industry rhodium demand this year. Rhodium prices are expected to remain stable in 2025. Price support factors include a slight supply shortage, low above-ground inventories, and a reduction in the impact of vehicle manufacturers adjusting inventories. At the same time, due to the downward pressure on rhodium demand in the medium to long term from the electrification of automobiles, rising rhodium prices will create selling opportunities. Therefore, it is expected that rhodium prices will still maintain a range of fluctuating trends in 2025.
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