Demand supply fundamentals Discussing demand/supply fundamentals for gold, Reade says that one of the most significant trends observed, is the sharp rise in investment demand, alongside continued — albeit slightly lower — central bank purchases. “That additional demand must be met from somewhere.” On the supply side, growth remains limited.
Impact of soaring gold prices on other precious metals Interestingly, the soaring price of gold has triggered a similar upward trajectory in other precious metals like silver and PGMs. Silver, driven by both investor demand and industrial use (solar, EVs), has risen over 150% in the past year. Increased costs are also impacting industrial applications,
Mine production is expanding only slowly, and recycling — including jewellery scrap — has also increased at a modest pace. As a result, the surge in investment demand over the past year has been largely accommodated by a decline in jewellery consumption.
forcing manufacturing, electronics, and aerospace sectors to adjust to higher material expenses.
“Silver has largely followed gold’s upward trajectory through much of 2025. After lagging in the previous couple of years, investors began to view it as undervalued, which triggered strong buying interest. As a result, silver experienced significant volatility throughout 2025,
Several investors have been purchasing call options with strike prices of $10 000 an ounce, expiring in December 2026. In other words, they are buying financial derivatives that would pay off if gold were to reach — or exceed — that level.
“Indeed, jewellery demand has fallen quite sharply over the past two years as higher prices have dampened consumer appetite. In effect, weaker jewellery demand has helped offset the strength in investment flows. The most notable shift in the market, therefore, has been the rotation from jewellery buying towards investment demand. Regarding central banks, while they have been significant buyers, they are not the largest source of demand overall. In a global gold market of roughly 5 000 tonnes annually, central banks purchased just over 1 000 tonnes per year in 2022, 2023 and 2024, before easing slightly to around 863 tonnes in 2025. Even so, investment demand remains a substantially larger category than official sector purchases. We expect central bank demand to remain relatively strong. That said, as gold prices rise further, higher valuations could act as a constraint, potentially slowing the pace of purchases compared with recent years.”
particularly in January 2026. More recently, like gold, it appears to be
stabilising after correcting from its recent highs. Investors have been active not only in purchasing these metals but also in taking profits — especially in silver, where some holdings have been in place for decades and are now returning to the market. Overall, trading activity in both gold and silver has been very robust. Regarding the platinum group metals market, it is worth noting that platinum benefited from the launch of a new futures exchange in China, which appears to have renewed investor interest in the metal there. Like gold and silver, platinum corrected from its recent highs in 2025,” concludes Reade. These buyers are typically motivated by inflation concerns, currency and macroeconomic uncertainty, portfolio diversification and — in the case of jewellery — deep cultural traditions. n
April 2026 | www.modernminingmagazine.co.za MODERN MINING 13
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