It’s not just the ups and downs; it’s the round and round as well as the corkscrew.
You try to keep your eyes on the horizon, but one second your staring at the sky, a fraction later you’re free falling to oblivion.
Just as you’re about to be wiped out you charge upwards again. The brakes suddenly jam on and you come to a sudden stop and then your neck snaps back as you accelerate away again. Then just as you think you’ve had all you can take, you get turned upside down and see the world the other way up.
Why would you ever want to get off? Sit back and enjoy the ride; its only just got going.
What a start to a New Year! We’ve seen gold trade over a USD 1,200 range in just a few weeks; Platinum nearly USD 900 and Palladium over USD 500. As for the semi-precious metal, silver, USD 50 range, or 60% of its opening value. Interestingly, for most of this period, the silver “At The Money” one month option volatility has been trading around 60% too.
Do those option traders know something? Or are they just following the trend.
War, Oil, Dollar and Precious Metals
This is just the beginning.
The medium term will keep the Rollercoaster spinning. The immediate effect was for prices to jump higher after the initial attack, only to plunge on a sudden (and unexpected) surge in the value of the US Dollar.
The accelerating oil price hit Platinum and Palladium particularly hard as an expected drop in demand for catalyst dropped.
However, this is all short term. Higher energy costs are inflationary and will lead to higher gold prices as an obvious hedge. Silver supply to major markets will be further disrupted by logistical bottlenecks and higher shipping costs. Palladium will bounce back as demand for new economical vehicles kick in (we’ve seen this in all previous oil crises); but the big winner will be Platinum.
These huge Gas-to-Liquid plants in Qatar that have been targeted contain over 4 tonnes of Platinum, around USD 320 million, in various catalysts. The catalyst is leased from banks that will only have limited war insurance. The upshot is that several tonnes of Platinum will be needed to replace the damaged catalysts while they are recovered and recycled.
Platinum lease rates will increase substantially to cover the demand and what is now considered high risk lending. Twenty years ago when I was involved in financing Platinum to the oil and gas industry, 140,000 ozs of Platinum in catalysts was stored in several shipping containers in the interior of Qatar, guarded without physical barriers by satellite surveillance and a rapid response team in the City. Those days are gone.
Gold
As this chart shows, gold is back “on trend” despite the cheers and screams from the Roller Coaster. Obviously gold is the “Steady Eddie” of the metals and will over any given period of time, continue to climb relentlessly.
It opened 2026 at USD 4,348, peaked on 29th January at USD 5,596, before plunging to near it’s starting price to USD 4,400 just three days later (two of those were weekend days). Now we have the effects of the actions in the Middle East that affects gold more than any other metal. As the US fleet approached the Gulf, the price run up, to peak when the action started, only to correct back once the first thrust was over despite ongoing action.
Silver
Silver in some ways has a very similar path as gold.
The price peaked on 29th January (USD 121.62), plunged on 2nd February and the trend is again upwards. However, on 6th February it opened way below where it started the year at USD 64.03; yet now we are back to where we expected to be.
The silver Roller Coaster will really put on some momentum over the next few months. There are still big squeezes on supply flow that will only be aggravated by the disruption to logistics by both sea and air. The UAE is a major trans-shipping hub. Hang on tight because there are going to be some big plunges, but if you hang on, you will climb back to a new high – if your nerves can stand it.
Palladium
Palladium followed a similar path to gold, but with a few more sudden stops and starts.
It opened at USD 1,615, appeared to have peaked just shy of USD 2,100 on the 26th January, before the surge in gold on the 29th, tipped it over USD2,100. Initially it resisted the plunge in gold, but like silver and platinum, got pushed below it’s opening price on 6th February and a low on 9th March as oil prices peaked.
Despite all this, the trend line says steady as she goes. Almost ignoring action elsewhere.
Platinum
Now Platinum has had a really nauseous ride.
Opening at USD 2,100, it had got close to USD 2,900 by 27th January, before getting caught up in the panic, dropping to it’s opening price on 2nd February before after a brief recovery, plunging to USD 1,900 on 6th February.
It has now finally recovered back above it’s opening price. Take this brief dip as a buying opportunity, it will be setting new highs sooner than you think.
Are the Bullion Banks really Nice Guys?
Have the Bullion Banks out of the kindness of their hearts been deliberately supporting industrial demand for silver by suppressing the price of silver and supplying us with cheap solar panels, electronics and chemicals, while helping keep inflation and energy costs down?
What nice guys! Or have they been taking advantage of the turmoil in the markets and their near monopolistic powers in the market to make phenomenal sums of money? Mmmm, that’s a tricky one.
With the control of the market in a cartel of the big seven bullion banks, I wouldn’t bet against them. They make their money in volatility. They can get away with eye watering high prices and depressing low prices on ever widening spreads and lease rates.
Are they in it as a public service, or to extract as much profit as they can from the market? No one wants to trade in a flat market.
However, other banks late to the party may not be in such a strong position and may find out not only has the booze run out, but they have been left with the Bill. Do you take Euros, Yen or Swiss Francs?
2nd April 2025. Metals Liberation Day! Coincidentally, Trump declared it his Liberation Day.
When Trump declared 2nd April 2025 as Liberation Day, no one was certain what it would mean. What has happened is the liberation of metal prices. 23rd February 2026, Trump Liberation Day 2.0 and metals go up again.
It has had little effect on gold that has continued to plod away around the 60% pa mark we’ve seen since Q4 2022. It did kick-start Palladium, up 75% after a dull 2024 and unleashed Platinum up 125% after a difficult decade.
Then we had Trump Liberation Day 2.0 on 23rd February.
This time it affected gold too; though this did also coincide with another US carrier group arriving in the ME.
And then there’s silver. Silver started to revive in late 2023 and had a comparatively good 2024, but has really kicked on in 2025, putting on 250% between 2nd April 2025 and 29th January 2026. Under ten months and is still up over 160%.
There seems no signs of this market changing for the next three years. Will Trump stop throwing curve balls? Will Europe become more or less politically stable? Have we really seen the end to high inflation? Will Iran’s regime change? Will Putin and Zelensky shake hands and agree to differ? Will the Palestine issue be reconciled? If you think yes to most or all of these, get out of precious metals and in to equities, but I won’t be following you.
