After the recent correction of almost -10% in gold prices and -15% in silver prices, it seems interesting to us to look again at the outlook for precious metals. We have mentioned it frequently, the driving force behind the structural rise in gold lies in the solid demand from central banks and countries participating in the BRICS (Brazil, Russia, India, China, South Africa). The recent correction in the price of the yellow metal is essentially linked, in our opinion, to the anticipation of the negative effects of the future policy which will be deployed by Donald Trump in 2025, with in particular certain implications considered very risky for the evolution of inflation, interest rates and American monetary policy.
The increase in long-term US Treasury rates from 3.6% to 4.5%, unjustified for the moment according to our analyses, has largely contributed to the significant profit-taking observed on gold and silver. These expectations are excessive in the overall context of 2025, which should be marked by an easing of monetary conditions and a stabilization of the dollar. The uncertainties generally favorable to an appreciation of gold will not diminish with the Trump presidency. Future trade tensions and concerns over US debt financing remain factors supporting demand for physical gold. Gold should once again play a stabilizing role in central bank portfolios and reserves. The appetite for precious metals has therefore not disappeared, it has tempered with the probably temporary revision of the rate of rate cuts by the American Federal Reserve (Fed).
After a consolidation of around -20%, the gold mining index can bounce back to its 200-day average, having thus erased the summer increase. Now is the time to reconsider exposure to gold or silver, but even more so to gold and silver mining companies.
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