Spot gold began the new quarter firmly bid, changing hands near $3,349 /oz in morning trade, a 1.4% gain that built on yesterday’s late-session recovery as the U.S. dollar index slipped to a three-year low and tariff deadlines kept risk appetites in check. Physical desks reported consistent Asian interest overnight, with Indian and Chinese wholesalers active on dips below $3,320, mirroring the “buy-the-dip” pattern that has characterised 2025’s record-setting run. The underlying tone was strengthened by HSBC’s decision to lift its average 2025 gold forecast to $3,215 /oz, citing elevated sovereign-debt risks and entrenched central-bank buying. Indeed, BIS data show official-sector net purchases running 18% above last year’s pace through May, and refiners in Switzerland confirmed tight physical premia for 1 kg bars despite seasonally slow European jewellery demand. On the supply side, South African output disruptions linked to rolling power cuts trimmed May mine supply by an estimated 4 t, the fourth monthly decline in succession, while logistics bottlenecks out of Istanbul delayed some Middle-Eastern scrap flows. Traders also noted a widening spot-to-futures spread on the CME as July contracts rolled off, a sign that near-term physical tightness is being underpriced in the paper market. Technically, bullion has regained the 50-day exponential moving average at $3,330, leaving April’s intraday all-time high of $3,500 within striking distance; dealers see resistance at $3,417 and $3,431 should risk events—most notably Thursday’s U.S. payrolls—deliver another dollar wobble. With Basel III funding rules continuing to penalize unallocated positions, bullion banks have reportedly shifted more inventory into fully allocated London vaults, a structural change that could further reduce float and keep spot prices well supported even if macro data surprise to the upside.
Silver’s story is one of chronic scarcity colliding with accelerating industrial demand. The white metal hovered around $36.34 /oz, up 0.75% on the session and barely two dollars shy of the 13-year peak printed in early June. While gold’s rally has dominated headlines, silver has quietly advanced 24% year-to-date, fuelled by surging photovoltaic and EV requirements that now account for more than half of global offtake, according to the Silver Institute. Physical premiums illustrate the squeeze: major U.S. coin dealers are quoting $4–$5 over spot for 1-oz American Eagles, and Shanghai’s wholesale market is running a steady $0.15 premium, an arbitrage window that continues to draw tonnage eastward. The July COMEX delivery period surfaces nearly 6,000 t of open interest technically eligible for off-take, a figure that—if even partially stood for—would exceed registered stock by a comfortable margin and could force a further decoupling of futures from the cash market. Supply meanwhile remains constrained; Mexico’s largest primary silver mine trimmed full-year guidance after heavy rains curtailed Q2 output, and refiners report slower dore inflows as lead-zinc miners prioritize base-metal concentrates. The gold-to-silver ratio has slipped to 92 : 1, its lowest since last October, as investors rotate into the more volatile metal in expectation of a catch-up trade. Options desks note increased appetite for $40 August calls, while chart watchers point to a clean upside target at $38—breach that and algorithms could chase prices toward the psychological $40 handle. Yet the investment case remains anchored in physical realities: Basel III’s NSFR does not extend to silver, but bullion banks face rising capital charges on unallocated pools, prompting a gradual migration into fully backed vault accounts that remove float from the system. With macro tailwinds of softening U.S. data, a likely Fed cut in September, and lingering tariff uncertainty supporting safe-haven flows, silver appears poised to re-test decade highs. Caution is warranted around Thursday’s holiday-thinned liquidity, but barring a dollar rally, dips below $35.50 look set to attract end-user demand ahead of key industrial restocking later this quarter.
