Mar 2026

Weekly roundup for StoneX Bullion

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

After that very heavy fall in both gold and silver prices at the start of last week most of the rest of the week saw prices consolidate. As we wrote in last week’s piece the major sell off was triggered by the escalation of the conflict in the Gulf and continued concern over other armed conflicts along with the markets keeping an eye on the developments with respect to the Fed and the possibility that Kevin Warsh would not have been in post by mid-May because of the legal block that is in place while the Department of Justice subpoena operation is still active. The move was exacerbated by technical factors.

Once more it is worth explaining the role of gold when markets are in distress. A lot of investors buy it as an insurance policy against potential losses in other asset classes and so when there is a problem in equities in particular, or sometimes also in Treasuries, the gold price comes down at the same time as those other asset classes and this can cause some confusion amongst people who don’t follow the market closely. Essentially what happens is that gold is primarily an insurance policy or, if you prefer, a hedge against risk, and so when other asset classes come under severe pressure as they did last week then gold will generally be sold in order to raise cash against potential margin calls because it is a deep and liquid market.

Also historically gold has always settled T+2, i.e. two days after the trading date, and until relatively recently within the last 20 years or so the vast majority of equity markets settled in T+3 or longer. Now, even though most equities settle in T + 2. Even so, gold is still sold in distress as its liquidity helps generate funds ahead of potential margin calls or further distress. Almost invariably when distressed investors have liquidated gold in order to fend off problems elsewhere they will reinvest once the dust has settled. Over the course of last week we saw perhaps a little bit of this happening.

Gold and stressed markets

Now with the market having taken a much needed wash out, professional trading houses are generally sitting on their hands and are not prepared to take substantial positions in either direction. Given that the market had been overcrowded and did need a substantial fall from the heady heights of over $5,500 it is hard to see those level being regained. It is down 19% from the highs so to regain the peak it would need to put on 23% to unwind the losses of last week. The same principles apply to silver in terms of price action; down 41%, would need to rise by 69%.

Gold and stressed markets

Rhona O'Connell, Head of Market Analysis, EMEA & Asia, 30th March 2026

Tel: +44 203 580 6115 / mobile +44 7384 833897

The area that caught the last week was activity in the official sector. The press has carried reports that Turkey sold some 20t of gold in the first part of March and released roughly 30t through swap movements also, in an exercise designed to defend the lira, which has been under considerable pressure. The first press story said that the central bank was “considering” using gold reserves in order to help the currency and the fact that they said that they were considering it almost certainly meant that they had already done so. Of course that proved to be the case. This action demonstrates the use of gold as an asset of last resort; the question is if as and when the lira has stabilised and consolidated, will they also reinvest. Here too it is a question of waiting to see. Elsewhere the Polish central bank is considering using gold in order to help its defence programme.

There was also one other headline which may have caused some confusion, and this referred to the Banque de France booking a profit on some of its gold holdings (the piece itself was clearer). This could have implied that they had been outright sellers; in fact that was not the case. The bank was taking metal out of New York and in that part of the transaction they did book a gain. What was happening thereafter was that the metal was being brought into Europe for re- refining into London good delivery bars so they were not sellers, it was a physical transaction getting gold out of one location and into another.

Meanwhile the four leading Chinese banks have been warning against too much exposure to gold in these volatile conditions and at least one of them is said to be considering capping investor positions.

Meanwhile the latest figures from the World Gold Council for the gold holdings in exchange traded funds were released last Friday 27th and shows that in the year to date there has been a net gain of 58t in ETFs around the world. But if we look back to the end of February that gain had been 120t which obviously implies that 62t have come out during March. Silver ETFs by contrast have been losing metal for much of the year and currently stand at just under 25,000t which compares with world mine production of between 26,000 and 27,000t. These figures are compiled by Bloomberg and may not be comprehensive (certainly the gold numbers are not) but it is the best guide that we can use and what it does show us is that so far this year they have lost 1,866t.

COMEX inventories have come down by 6,320t since the end of September and while we do not know how much of that has gone directly into London and into LBMA vaults, what we do know is that while US imports into the UK have typically averaged roughly 600 tonnes over the course of the last few months, that went up to something like 1600 tonnes during February. After reaching almost 17000 tonnes in the wake of the “Liberation Day” on April 2nd last year they are now down to just over 10,200t, which is much more like the normal level of holdings on the Exchange.

Staying with COMEX and looking at the managed money positions in the week to 24th there has been another very small increase in outright longs, rising from 389t to 405t and a very small increase in shorts from 803t to 807t. The silver position is more extreme; after further light liquidation the outright longs have dropped to 2,053t and this compares with 6,570t for the 12 month average, a shortfall of 69%. Shorts edged out slightly, but they are still much lower than usual standing at just 485t compared with over 2,100t towards the end of last year.

Outlook: small bounce

So as noted in the commentary above we expect these markets to continue to mark time. While watching develop elsewhere there is a degree of bargain hunting in both but probably with not much conviction. The physical markets at the retail level are relatively quiet and that development in China is particularly interesting and we will be keeping our eyes on it. We still believe that the highs are in for both metals.

Outlook: small bounce