Mar 2026

Precious snapshot

By Rhona O'Connell, Head of Market Analysis, EMEA & Asia

Back after a crazy few weeks!

While your correspondent has been away the geopolitical environment has continued to be an over-arching influence on the precious metals, predominantly gold and silver, although platinum and palladium have also been whipped by outside influences.

Obviously the most recent and dramatic development has been the escalation of the conflict in the Middle East. The attacks on Iran and the retaliation around the Middle East have boosted gold and silver as well as taking oil to a different level; the former reflect risk-aversion while oil is reacting to a potential supply shock. The US/Israeli co-ordinated attack followed the breakdown of negotiations over Iran’s nuclear programme.

Further support came from the Supreme Court’s ruling on the International Emergency Economic Powers Act (IEEPA) tariffs and the subsequent massive rise in litigation, not to mention uncertainty . Then President Trump’s stated intention to impose widespread 10% tariffs under S 122 of the Trade Act of 1974 has also drawn legal opinion that this, too, would be illegal.

Meanwhile US inflation came in higher than expected with PPI posting its largest month-on-month increase (0.5%, the largest gain since January 2025), even as yields fell on the risk-off trade and US factory orders fell 0.7% M/M, although in fairness this was pulled down by weak transport numbers – ex-transport, the change was +1.0%.

In the background, gold ETFs have made small additions this year but the CFTC net long positioning is well down. Silver ETFs have seen some chunky redemptions while CFTC has seen some long-side nibbling and plenty of short covering, but here the net long of 1,395t is only 29% of the12-month average. On COMEX, silver inventories have come off sharply over the past few weeks and, at 11,207t, are down by 5,323t from the end-September levels and getting back towards the more normal 9,000-10,000t levels. This may take some of the volatility out of the market as it helps to ease London’s position. Gold inventories have come off by 91t or 8% since the start of the year and at 1,036t, are 11% lower than the average for the whole of 2025.

Outlook:

On the basis of the above background observations, there is little exchange-based speculative overhang in either metal, reflecting profit taking in silver in January and steady liquidation on COMEX. Now this can be argued either way; a) there is less scope for selling into strength than hitherto or b) stakeholders think the markets are overdone. The answer is probably a combination of the two. Gold is at the top of its uptrend and the RSI is approaching 70. Silver is sitting on a Fibonacci retracement level after its steep correction.

Putting all these together suggests that gold and silver may have done enough for now and need to unwind overbought conditions, but the downside remains limited. Barring further geopolitical escalation, it is time for a breather.

In this febrile atmosphere the strength in gold and silver should be sustained until conditions settle down. Until then the markets will remain in risk-off mode.

Gold COMEX positioning, Money Managers (t)