Gold and silver enter a new high-volatility regime – Heraeus
NEW YORK (February 9) Both gold and silver are no longer behaving like safe havens of any kind, and have instead moved into a high-volatility regime – which changes the rules of the game for investors, according to precious metals analysts at Heraeus.
In the latest update, the analysts wrote that gold has transitioned from a safe haven to a speculative asset.
“The seeds of the price decline were sown in the preceding rally that for a supposedly low-volatility safe-haven asset was exceptional,” they said. “The price of gold has gone up 5x in 10 years but the dollar index is at the same level that it was in 2015. With such a sharp price drop there was likely an element of leveraged positions being unwound, with stop losses being hit and rising margin requirements. Exchanges are still raising margin requirements for futures’ positions.”
The analysts also cited World Gold Council’s Q4’25 Gold Demand Trends report, which showed gold demand reaching 5,000 tonnes for the first time last year. “That was driven by significantly higher investment demand that more than offset declines in jewellery and industrial uses,” they wrote. “Central bank purchases came to 863 tonnes, 21% lower than the record 1,092 tonnes in 2024, but still higher than any year prior to 2022. Gold demand in the fourth quarter also reached a record of 1,345 tonnes, again with investment offsetting weakness in jewellery and industrial demand.”
They cautioned investors to expect more price volatility in the weeks and months to come. “Last week the gold price rebounded more strongly than the other precious metals, recovering more than 50% of its decline, but the rebound faded later in the week,” the analysts noted. “That still leaves the gold price clearly higher than at the start of the year, which is more than can be said for the white metals.”
“It is unlikely that new record highs will be achieved in the near term as it will most likely take months rather than weeks to unwind the excessive enthusiasm that pushed the gold price up so far, so fast,” they added. “Support was found at $4,400/oz which could be tested again.”
Gold has broken back above $5,000 per ounce again on Monday, and the yellow metal continues to challenge near-term resistance near $5,045 per ounce.
Spot gold last traded at $5,036.84 per ounce for a gain of 1.45% on the session.
Turning to silver, Heraeus analysts noted that silver is now firmly established in a higher-volatility regime.
“Silver initially saw a rebound after Friday 30th’s violent sell-off, which reversed by mid-week,” they said. “Retail dip buying has driven large ETF inflows into silver, with almost 32 moz being added to ETF holdings last Tuesday, taking the total back to 850 moz.”
“Trading in China may have resulted in the price dropping sharply on Thursday, which appears to have been a case of selling the rally to cut losses, or possibly for the luckier or nimbler traders to take profits,” they added. “The Shanghai Futures Exchange and the Shanghai Gold Exchange have both lifted margin requirements.”
“The gold:silver ratio has jumped to 64 after silver’s more dramatic price declines and just as silver outperformed gold on the way up, it is falling faster on the way back down.”
Silver prices are trading back above $80 per ounce as they follow the gold price higher in early North American trading.
Spot silver last traded at $82.018 per ounce for a gain of 5.20% on the daily chart.
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