(Kitco News) – While a number of preliminary trade tariff deals have taken some pressure off equities and other risk assets, and precious metals ETF and futures markets are quiet, gold and silver still enjoy key drivers and solid price support, according to Rhona O'Connell, StoneX Head of Market Analysis for EMEA & Asia.
In her latest precious metals analysis published Wednesday, O'Connell said that while the yellow metal showed signs of life amid last week’s drama, gold has been stuck in the $3,200 to $3,450 range since April 23, and between $3,300 and $3,400 since the end of June. “Prior to that, further failure at $3,440 on 22nd and 23rd July led, along with continued apparent easing in trade tensions, to a gradual decline until the Nonfarm Payroll employment numbers last Friday,” she said.
“The physical markets are quiet virtually everywhere as a result of economic uncertainty and the time of year,” she noted. “There is little evidence of much bargain hunting, and equally, the near-market recycling supplies are slow.”
Looking ahead, O'Connell pointed out that the monsoon season is now underway in India, which has had a good start and bodes well for the harvest. “Since 60% of the population in India is reliant to one extent or another on the harvest, and farmers favour gold as a primary investment, this currently points to an uplift post-harvest (September) and just ahead of the Festival Season,” she said.
As for silver, O'Connell pointed out that while gold pulled back from $3,439 to S3,268 from July 23-30 – b a loss of 2% – silver fell from $39.5 to $36.2, “a drop of 8.4%, larger than the normal beta between the two, reflecting economic concerns and an over supplied solar market.” Prices have since risen to $37.3, fulfilling a Fibonacci 38% recovery.
“Retail investment demand is quiet everywhere for silver also, and the coin market remains moribund; the Shanghai differential is flat,” she noted.
O'Connell said that her outlook for gold and silver remains unchanged. “For the much longer-term, silver has a robust fundamental outlook, but for now it is stabilising above $36 with Fibonacci resistance now lower than last week, at $38.77,” she said. “Gold has unwound some of its long-standing risk premia, but the economic and political environment remains constructive; support at $3,295 was breached briefly last week, but there is a good body of support between $3,200 and $3,280.”
Turning to Exchange Traded Product (ETP) flows, O'Connell said gold appears virtually flat, and while silver is still on an upward incline, the gray metal looks vulnerable to profit taking.
“The latest figures from the World Gold Council, up to 28th [July] show a slowdown in net creations,” she said. “This is more a function of reduced buying rather than any heavy sales. In the year to late June, net additions were 994t, but in the subsequent four weeks, they have dwindled to just 24 to a total of 3,639t. Bloomberg numbers since then (not as extensive as the WGC coverage) suggest a small net gain of just one tonne.”
The ETP data for silver is more encouraging. “The Bloomberg figures suggest that the net ETF creations in H1 2025 were 1,761t, of which 989t were in June,” O'Connell noted. “Since then, a net 457t have been added (Bloomberg figures), taking the total to 24,461. There have been ebbs and flows, but a few days have seen purchases of more than 200t and in the period 21st-28th July as prices moved from $38.14 on 21st to peak at $39.53, then slide to $38.17 before slipping further to receive support offered by the 50-day moving average at $36.47.”
In the futures markets, O'Connell wrote that COMEX Managed Money saw a bearish reversal in gold sentiment while silver positions contracted on both sides.
“After expanding from 514t to 606t in the first three weeks of July, the managed money longs contracted to 532t in the final week as gold lost its upward momentum,” she said. “Shorts expanded fractionally from 108t to 114t.”
Silver longs also fell from 9,692t to 9,285t “while there was also some short covering, with positions easing to 2,292t from 2,348t.”
