Physical precious metals faced selling pressure on Monday, August 11, 2025, as both gold and silver retreated from recent highs amid easing geopolitical tensions and profit-taking activity. Gold spot prices declined $43.48 to $3,355.22 per ounce. Silver spot prices fell $0.49 to $37.86 per ounce. Despite today’s pullback, both metals maintain remarkable year-to-date gains, with gold advancing 28% and silver climbing 31% since January.
The Federal Reserve’s monetary policy outlook continues to underpin precious metals fundamentals, with markets pricing an 87% probability of a 25 basis point rate cut in September following disappointing employment data. The Fed held rates steady at 4.25%-4.50% at its July meeting, but witnessed historic dissent with two governors voting for immediate cuts – the first multiple-governor dissent since 1993. Core inflation remains elevated at 2.9% year-over-year, while real GDP expanded 3.0% in the second quarter after contracting 0.5% in Q1 2025. Central bank gold purchases reached a quarterly record of 244 tonnes in Q1 2025, with Poland leading acquisitions at 67 tonnes as institutions diversify away from dollar-denominated reserves.
HSBC raises silver price outlook on gold strength, geopolitical risks has emerged as today’s key market development. The global banking giant has significantly lifted its silver price forecasts for the coming years, now expecting average prices of $35.14 per ounce in 2025 (up from $30.28 previously), $33.96 in 2026 (versus $26.95 formerly), and $31.79 in 2027 (against $28.30 earlier). HSBC attributes the bullish revision to silver’s strong correlation with record-high gold prices and persistent safe-haven demand driven by geopolitical uncertainty and the ongoing US-China trade conflict. However, the bank cautioned that silver’s rally is “due more to silver’s relationship with gold than to underlying fundamentals,” with record-high gold exerting a “strong gravitational pull” on the white metal. The institution projects a silver deficit of 206 million ounces in 2025, widening from 167 million ounces in 2024, before narrowing to 126 million ounces in 2026. While industrial demand may edge lower this year after four years of record growth, HSBC expects recovery in 2026 driven by photovoltaic and electronics sectors, though jewelry demand will likely weaken due to elevated prices.
