Strengths
- The best performing precious metal for the week was silver, up 2.63% as prices broke above their recent trading range and held key support levels despite higher Treasury yields and the Federal Reserve's first interest-rate hike since 2023, reinforcing confidence in the strength of the ongoing rally.
- Gold ETF holdings extended their buying streak to eight consecutive days, the longest since October 21. ETFs added 52,500 troy ounces in the latest session, equivalent to $227.9 million, bringing 2026 net purchases to 1.46 million ounces. Total gold held by ETFs reached 100.4 million ounces, the highest level since March 3. Global gold-backed ETFs recorded $18 billion in August inflows, the second-largest monthly inflow in value terms on record, lifting total holdings by 121 tons to an all-time high.
- Swiss gold exports jumped 65% in August, led by more than 100 tonnes of shipments to the UK, signaling robust physical demand and continued movement of bullion into major global trading hubs. Swiss gold imports rose to 205 tons from 154.8 tons, indicating robust growth.
Weaknesses
- The worst performing precious metal for the week was palladium, down 0.48% as investors remained cautious on the outlook for automotive demand, with softer vehicle sales expectations continuing to pressure the metal's largest end-use market.
- Record-high diesel prices are beginning to impact miners, as fuel and mining consumables are likely to face higher costs. Mine optimization plans and cost-management strategies may need to be recalibrated accordingly.
- Hemlo Mining reported an underground electrical substation outage on September 4. The substation powers a portion of the Alimak production area, where roughly 20%–25% of mine production occurs. A bypass system has restored partial power, allowing limited mining to continue, while a replacement substation is expected in December. In the interim, Hemlo is evaluating alternative power and mine sequencing options. Management noted that both tonnage and grade will likely be affected, according to BMO.
Opportunities
- Franco Nevada has announced that it has entered into an agreement to acquire a A$170 million gross royalty from Minerals 260 Limited to support its development of the Bullabulling Gold Project located in Western Australia. Additionally, Franco Nevada has agreed to subscribe for A$30 million (about $22 million) of Minerals 260’s ordinary shares as a lead order in a future equity raise, according to Raymod James.
- Tether has emerged as a major source of liquidity in the precious metals market, providing approximately $1.5 billion in bullion financing to Gold.com and accounting for the majority of its outstanding metal leases. The investment underscores growing participation from digital-asset firms in precious metals markets, potentially expanding access to capital and supporting long-term demand for bullion.
- Hong Kong's new five-year plan positions gold at the center of its strategy to expand commodities trading and internationalize the yuan, with plans for an integrated hub covering storage, trading and clearing. The initiative strengthens links with mainland Chinese markets and could enhance Hong Kong's role as a major global precious-metals trading center.
Threats
- Australian gold producers are facing growing cost pressures as higher diesel prices, labor shortages and consumables inflation continue to drive operating expenses higher. These headwinds are expected to persist into FY27, with average all-in sustaining costs projected to rise 15-20% year-over-year, reflecting tighter contractor availability and increasing capital intensity.
- Venezuela's government and opposition are reportedly nearing an agreement that would grant the country legal control over roughly $4 billion in gold reserves currently held abroad. While the gold could not be immediately sold, it may be used as collateral for government borrowing, raising the potential for future gold-backed financing and creating a possible overhang for bullion sentiment.
- Gold has remained resilient on the back of strong ETF buying, even as higher interest rates and rising Treasury yields create a less supportive macro environment. However, history suggests that ETF-driven demand may prove temporary if the U.S. dollar continues to strengthen and expectations for additional Fed tightening persist, potentially weighing on bullion prices over the medium term.
