As of end-June, FxEmpire analyst Arslan Ali says two forces are providing
structural support for precious metals: ongoing official buying and tight
new-mine supply. Central banks have been diversifying reserves and increasing
gold holdings to hedge high public debt and shifting monetary-policy risk,
creating a relatively independent, persistent source of demand. New-mine output
for gold and silver remains constrained: gold production has not meaningfully
increased since its prior peak due to aging mines and rising extraction costs;
silver faces similar supply pressure but is partially offset by byproduct output
from other metals. On the demand side, silver’s industrial use remains
strong—notably in photovoltaic (PV), electronics and electric-vehicle (EV)
manufacturing—reinforcing structural upside amid the energy transition; silver
also retains monetary-asset attributes. Investor demand from ETFs and physical
holdings provides an additional stable base for both metals.
