According to CNBC International, analysts believe the rally that pushed precious metals to record highs in 2025 may not be over yet, despite heightened volatility this year.
Spot gold held near a one-week high at around $4,688 an ounce after climbing nearly 3% on Wednesday, while US gold futures edged higher to around $4,696. Silver prices also remained elevated following a strong rebound.
The gains came after reports suggested the United States and Iran may be nearing a deal to end the 69-day conflict, although unresolved issues around Iran’s nuclear programme and the Strait of Hormuz remain.
The prospect of easing geopolitical tensions pushed global equities to record highs while weighing on oil prices and the US dollar.
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Bullion rally may still have room to run
Gold and silver surged 66% and 135%, respectively, during 2025 before witnessing sharp corrections earlier this year amid rising bond yields, profit-booking and concerns around higher interest rates.
Ross Norman, Chief Executive Officer at Metals Daily, told CNBC International that gold entered the conflict “significantly overbought,” prompting traders to lock in profits during the recent selloff.
“The dollar and gold both rallied, the former seeing hot money flows as energy supplies choked, while the dollar gained on safe haven flows,” Norman said.
“A peace deal would suggest those tailwinds ease off and we are seeing that just now. It’s as if the handbrake has been released from gold and silver.”
Francis Tan, Chief Asia Strategist at Indosuez Wealth Management, said gold continued to prove its role as a hedge during periods of market stress.
“If you look at March, when equities were selling, for an investor with some allocation in gold during that period, you were sitting on pretty strong returns in gold, and you could perhaps take some off the table to cover some of your equity losses,” Tan told CNBC earlier this week.
“So gold as a safe haven certainly has played its part.”
Analysts stay bullish despite volatility
Philippe Gijsels, Chief Strategy Officer at BNP Paribas Fortis, described the recent correction in bullion prices as merely a “consolidation phase.”
“This time around, precious metals have shown a strong correlation with equities. Both were mostly hurt by fears inflation would drive up interest rates,” Gijsels told CNBC International.
“In our world interest rates are like gravity. When interest rates rise, gravity increases and all assets are pulled down, including precious metals.”
Still, Gijsels said the broader structural drivers supporting gold and silver remain intact.
“We expect the secular bull market in gold and silver to resume and the metals to reach new all-time highs in the not too distant future, potentially this year,” he said.
“Central banks and governments will continue to diversify away from US government paper into gold. As we live in an environment of structurally higher inflation one needs to hold real assets.”
Paul Williams, Managing Director at Solomon Global, also told CNBC International that silver’s long-term fundamentals remain strong due to tight physical supply and rising industrial demand.
“Supply of physical silver remains tight, while strong demand from green technologies continues,” Williams said, adding, “The US-Iran conflict has only underscored the strategic case for solar power. AI-related demand remains significant and is growing, adding further pressure to an already stretched supply/demand balance.”
Focus shifts to US jobs data
Markets are now awaiting the US non-farm payrolls report due on Friday (May 8), which could influence expectations around the Federal Reserve’s interest rate path.
A stronger-than-expected US private payrolls report released on Wednesday reinforced expectations that the Federal Reserve may keep rates elevated for longer, although any signs of labour market weakness could revive hopes of future rate cuts.
Gold, silver prices jump in India
In India, bullion prices rose sharply across major cities on Thursday, tracking gains in international markets.
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Gold prices for both 24-carat and 22-carat variants increased by as much as ₹2,000, while silver prices surged nearly ₹10,000. Chennai recorded the highest gold prices among metro cities, followed by Hyderabad, Bengaluru and Mumbai.
Harshal Barot, Senior Consultant – South Asia & Middle East at Metals Focus, said strong imports earlier this year helped jewellers meet April demand despite imports falling to multi-year lows during the month.
However, he warned that supply tightness is now beginning to emerge after two straight months of weak inflows.
“Gold is at a premium of around $15 to $16 in the domestic market,” Barot said.
He added that the India International Bullion Exchange remains the primary route for imports, although import volumes remain significantly below normal levels, with only around 1.5-1.8 tonnes imported through the exchange in recent weeks.
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