(Kitco News) – Central banks’ switch from buyers to sellers has weakened the bid beneath gold prices even as the price action suggests further bearishness, while silver output from key producers is ahead of last year’s pace, according to precious metals analysts at Heraeus.
In their latest update, the analysts warned that central bank gold sales have removed a key driver of gold demand.
“The Turkish central bank has reportedly reduced its gold reserves by around 53 tonnes to 772 tonnes,” they wrote. “This is as a result of sales of 22 tonnes with the amount of gold-backed currency swaps being 31 tonnes. While this is only one bank and others may still be accumulating reserves, it demonstrates that central bank reserves are utilised in times of financial and economic stress, with gold performing its job as a counterparty free liquid asset.”
“Central banks added 863 tonnes of gold to their reserves last year,” the analysts noted. “If the market turmoil causes central banks to reduce purchases or make sales of gold, then that impacts a large portion of demand.”
Heraeus said President Trump’s Iran announcements are continuing to trigger volatility in the metals market. “The gold price sold off sharply early last Monday, reaching a low of $4,099/oz, before rebounding to the $4,400/oz level which also marked the low in early February,” they wrote. “Over the preceding weekend, President Trump had threatened to attack Iran’s power plants if the Strait of Hormuz was not opened within 48 hours. However, later on Monday the President postponed the strikes.”
“While the very short-term swings in price may be dictated by US foreign policy announcements, the near-term trend still looks bearish as the price consolidates after its dramatic rally to record highs in January,” the analysts added.
Gold spiked to a session high of $4,580 per ounce just before 8 a.m. Eastern, and it continues to challenge that level in the early minutes of the North American equity open on Monday morning.
Spot gold last traded at $4,568.57 per ounce for a gain of 1.66% on the session.
Turning to silver, Heraeus analysts said KGHM Group’s silver production has rebounded in the first two months of 2026.
“The company is a copper miner that produces significant quantities of silver as a by-product,” they said. “In 2025, the Group’s silver output was 1,323 tonnes (42.5 moz) from its mines in Poland, North America and Chile. Last year, production in February was impacted by processing plant maintenance, which reduced refined output. This year, production in the first two months of the year was 252.3 tonnes (8.1 moz).”
Coeur Mining has also updated its production guidance following their acquisition of New Gold. “New Gold’s portfolio includes two gold mines which have by-product silver and copper,” they wrote. “Coeur now expects to produce 18,680 koz to 21,930 koz of silver this year. This is up from 17.9 moz in 2025 and includes between 480 koz and 630 koz from the new mines, which implies that there is potential for the existing mines to expand output.”
Silver is also performing well on Monday morning, hitting a session high of 71.763 just after 9 a.m. Eastern and it continues to trade at the upper edge of its daily range at the time of writing. “The price has rebounded above $70/oz but if support around $64/oz is broken the next level could be $55/oz,” the analysts warned.
Spot silver last traded at $71.251 per ounce for a gain of 2.19% on the daily chart.
