Gold holds steady as tariff truce sparks silver rebound

The relatively muted demand for gold from ETF investors and futures speculators highlights the importance of other investors, especially those in Asia—more specifically in China—where solid retail demand for CNY-denominated ETFs in recent months has received a great deal of attention. Together with central bank demand, these two groups have so far managed to keep prices supported and have prevented an even deeper correction.

Having already reached our 2025 price target of USD 3,500, we are currently in wait-and-see mode. However, with several key structural drivers unlikely to dissipate in the near term, we continue to view the risk as skewed toward even higher prices over time. In the very short term, gold continues to consolidate, with the technical outlook—as per the chart below—raising the risk of a deeper correction towards a key area of support in the USD 3,155 to USD 3,165 area.

Silver making up for lost ground as economic clouds clears

While the dramatic truce in the US–China trade war—at least temporarily—has hurt gold, with a stronger USD and reduced safe-haven bid taking its toll, silver has managed somewhat better. Talks and lower tariffs have reduced the risk of a full-blown US recession later this year, while also slowing an economic slide in China. With silver deriving close to 55% of its demand from industrial applications, the white metal has managed to recoup some of the ground it lost in the weeks that followed Trump’s aggressive “Liberation Day” speech.

The gold–silver ratio—which ahead of April had spent months trading within a five-dollar channel around 90 ounces of silver to one ounce of gold—briefly surged above 105 after silver fell and gold found a haven bid in response to an escalating global trade war that raised concerns over economic growth and stability. The de-escalation in tariffs for a 90-day period saw global stock markets race higher, while procyclical commodities from energy to industrial metals received a bid. This helped shield silver from following gold lower, resulting in a drop in the gold–silver ratio back below 100 to a current level around 98.50. From a technical perspective, the ratio needs to drop below 97.50 before opening up the possibility of a return to the mentioned pre-April range.

As per the somewhat messy spot silver chart below, we note support continues to emerge around USD 32, ahead of Fibonacci support at USD 31.62—the 0.382 retracement of the latest 19% rally from the post-Liberation Day correction low. To the upside, some resistance has emerged around USD 33.25, ahead of a recently established triple top at USD 33.68.