(Kitco News) - Gold and silver continue to draw support from solid longer‑term fundamentals through the second quarter, but one investment firm said the market is still waiting for a clear macroeconomic trigger before either metal can break decisively higher.
In its latest quarterly metals outlook, London‑based brokerage firm Sucden Financial said elevated U.S. yields and a resilient dollar remain the main headwinds for gold, offsetting geopolitical uncertainty and steady physical demand that have so far acted more as a price floor than a launchpad.
“Meaningful upside requires lower real yields and a weaker dollar,” the firm said.
Sucden noted that gold has struggled to behave like a traditional safe‑haven asset despite heightened geopolitical tensions, particularly in the Middle East. Rather than pushing investors toward bullion, the latest flare‑ups have driven oil prices higher, feeding inflation expectations and lifting Treasury yields — a dynamic that has increased the opportunity cost of holding a zero‑yielding asset.
The analysts said that gold is unlikely to move meaningfully higher until markets begin to price in lower real yields, a weaker U.S. dollar, or a clearer shift toward Federal Reserve easing.
Still, the firm stressed that the broader structural backdrop for bullion remains firmly supportive. Gold ETF holdings remain historically elevated despite bouts of price volatility, suggesting institutional participation has held up well. That demand, however, appears to be limiting downside risk rather than fueling the kind of momentum typically seen at the start of a sustained rally.
Sucden said that gold is likely to remain rangebound in the near term, with support around $4,500 an ounce. A move toward $4,800 would likely depend on weaker economic data or more overtly dovish signals from the Federal Reserve.
The investment firm sees a similar environment for silver even as prices, earlier in the week, pushed to a two-month high above $87 an ounce. .
Silver, continues to benefit from a tighter fundamental backdrop than gold, supported by persistent supply deficits and comparatively light speculative positioning. After a sharp correction earlier this year, speculative positioning in COMEX silver has been pared back considerably, leaving exposure well below previous highs. ETF holdings have also retreated from late‑2025 levels, pointing to softer institutional participation despite ongoing market tightness.
Despite the recent momentum, Sucden said the market also lacks the scale of investment inflows typically associated with a sustained rally.
“Silver should remain supported in Q2, underpinned by persistent supply deficits and relatively light speculative positioning,” the firm said. “A stronger move higher would likely require renewed ETF buying, rebuilding speculative length, and a more supportive macro environment.”
The firm added that silver remains more sensitive to macroeconomic conditions than gold due to its significant industrial demand component. Silver could outperform gold in a so‑called soft‑landing scenario, where inflation cools and the Federal Reserve eases policy without tipping the economy into recession — a backdrop that would improve liquidity while preserving industrial demand.
However, Sucden warned that a sharper economic downturn could turn silver’s industrial exposure into a headwind, leading to greater volatility and potential underperformance relative to gold.
Looking ahead, the firm expects silver prices to remain supported between $70 and $72 an ounce. A recovery toward the $80 to $85 range would likely require stronger ETF inflows alongside improving macroeconomic conditions.
