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Iran and Israel are driving the headlines at the moment, as the two nations exchange verbal warnings about further retaliations following last week’s bilateral attacks. This has resulted in clear regional escalation, despite the somewhat telegraphed and controlled nature of the attacks and retaliatory threats. The fact remains: the world is a more dangerous place today than it was just a few weeks ago.

Over the past five trading sessions, we’ve observed significant volatility in the prices of precious metals, particularly silver, as it attempts to break out of the $28 range and hold above USD $29/oz. Gold is pressing up against USD $2400/oz again this morning, but we have seen some strong corrections recently, and I expect we’ll continue to see relatively dramatic movements intraday. These corrections are healthy and present good buying opportunities.

On the demand side of the equation, we're seeing continued strong buying from China, with premiums there surging in both gold and silver. Globally, gold ETFs witnessed their tenth consecutive monthly outflows in March, losing a net USD $823 million. Flows in North America flipped back to positive for the first time in 2024. Although Asia also saw net inflows, these were offset by losses in Europe.

The current theme is volatility. The world is at a point in time where many significant moving pieces are playing out simultaneously. We’re experiencing geopolitical regime shifts, monetary regime shifts, cultural/social regime shifts powered by social media and information wars, capped off with the acceptance of sticky inflation and ‘higher for longer’ interest rates. Gold’s recent performance is a measure of how unstable things are, and that people at all levels are expressing their concerns by buying the yellow metal (and silver).

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