(Kitco News) – The stock market selloff and mounting fears of a recession are driving demand for gold, while sales of silver coins are in freefall as high costs and markups discourage buyers, according to precious metals analysts at Heraeus.
In their latest precious metals update, the analysts noted that the market’s current risk-off posture is boosting gold’s safe-haven appeal.
“Concerns over a potential US recession are back in focus, with equity markets showing signs of strain,” they wrote. “The S&P 500 is now 2% lower than at 5 November 2024, when Donald Trump was elected, as persistent uncertainty over trade relations weighs on investor sentiment. On 7 March, hedge funds unwound single-stock positions at levels comparable to March 2020, reflecting a notable shift toward risk reduction.”
“Adding to the recession narrative, the 10-2 year US Treasury yield spread curve un-inverted in late 2024, having remained inverted since October 2022,” they said. “Historically, such un-inverting has preceded economic downturns by 6-12 months, putting Q1’25 at the beginning of this window. This shift in economic expectations, combined with rising geopolitical and trade uncertainties, has reinforced gold’s position as the preferred safe-haven asset.”
Heraeus said this shift is already showing up in futures market positioning. “Money managers remain more net long on gold now than for 65% of the time since January 2020,” the analysts noted. “Since the start of 2025, gold open interest has increased by 10%. In contrast, silver open interest dropped by 13% in just the last week of February as postponed US tariffs on Canada and Mexico were confirmed, alongside additional global tariff threats.”
“Notably, this rotation into gold has been occurring despite equities remaining strong for most of 2025 (the declines began on 20 February),” they added.
And while the selloff in U.S. stocks might still be in its early stages, gold is already attracting risk-off flows. “In January, net inflows into US gold ETFs amounted to $1.5 billion, whereas the number was just shy of $8 billion in February, the highest monthly total since March 2022,” they wrote. “Should economic data continue to soften and the global tariff war escalates, gold will continue to benefit.”
Gold prices have tested support near $2,980 per ounce multiple times on Monday, but the level has held up, while multiple attempts to breach the $3,000 level have been rebuffed.
Spot gold last traded at $2,990.96 per ounce for a gain of 0.20% on the session.
Turning to silver, Heraeus analysts noted that silver coin sales are collapsing across the globe.
“Silver coin sales from the Perth Mint and US Mint have fallen sharply in 2025, marking a significant downturn in physical investor and collector demand,” they wrote. “In February, Perth Mint sales dropped 52% year-on-year to 482 koz, while the US Mint saw a 45% decline to 928 koz.”
“A key factor behind the slump appears to be rising costs across both bullion and numismatic markets,” they said. “Investment interest may have been influenced by a significant rise in silver prices, which are up by over 37% year-on-year and sit at ~$33/oz." The analysts also pointed to the elevated prices for silver bullion coins relative to the spot price, which they believe is discouraging both investors and collectors.
“These trends have translated into year-to-date silver coin sales falling by 32% for the US Mint and 49% for the Perth Mint – the lowest year-to-date sales for the US Mint since 2018 and the weakest for the Perth Mint since at least 2013,” they added.
Silver ETFs have also seen outflows of 8.5 million ounces in 2025, though European investment in bullion bars appears to be stronger this year. “Heavier, cast bullion products tend to yield a lower premium than more intricately produced coins,” the analysts noted. “Despite the silver price rallying, it has underperformed gold and has not captured investors’ interest to the same extent. Without broader investor buying, silver could continue to lag behind gold.”
Silver saw a sharp selloff on Monday morning, falling from $33.824 per ounce at 7:45 am EST in the spot market to a session low of $33.434 at the North American open, but prices recovered just as sharply afterward.
At the time of writing, spot silver last traded at $33.772 per ounce and is down only 0.09% on the daily chart.
