Gold near its peak

The White House dealt a blow to gold by postponing tariffs on critical minerals. Although precious metals were not on the list, other assets in the sector were. Concerns about import duties played a key role in the rally in silver, platinum and palladium. However, the overflow of bullion in the US occurred at the initial stage of the rally. Subsequently, other factors came into play.

Gold's position looks strong amid extremely unpredictable geopolitics and ongoing tensions. The increasing polarisation of the world is forcing central banks to continue the processes of de-dollarisation and diversification of reserves. Although central banks remain net buyers, their purchase volumes are declining amid more than 130% price growth over the past two years, pushing prices to historic highs.

Our attention is also drawn to reports of a huge volume of short exchange positions held by active funds. At current prices and dynamics, especially in silver, an explosion of volatility could occur at any moment. This could be either the start of a sharp downward movement or a final short squeeze with growth to non-market levels, which could ultimately remove buyers from the market.