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WGC Projects Uncertain H2 for Gold Amid Economic, Geopolitical, and Policy Shifts

After a record-breaking first half in 2025, gold faces mixed prospects driven by inflation trends, interest rate moves, and global risk factors

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Gold emerged as the top-performing major asset class in the first half of 2025, posting a remarkable 26% gain in US dollar terms, according to the World Gold Council’s (WGC) Gold Mid-Year Outlook 2025. The surge was supported by a weaker US dollar, stable interest rates, and rising geopolitical tensions, which fuelled strong investment demand through ETFs, over-the-counter (OTC) markets, and global exchanges. Central banks also continued to add gold to their reserves, further boosting momentum.

Looking ahead, WGC’s Gold Valuation Framework outlines three potential scenarios for the remainder of the year:

  • Base Case: Gold remains largely range-bound with a slight upside of 0–5%, supported by cautious rate cuts and lingering macroeconomic uncertainty.
  • Bull Case: A deteriorating economic environment—such as stagflation or recession risks—could drive gold up another 10–15% as investors increase allocations to safe-haven assets.
  • Bear Case: If geopolitical tensions ease and global economic growth strengthens, gold prices could decline 12–17%, pressured by rising yields, a stronger US dollar, and reduced investor hedging.

The first half of 2025 also saw gold set 26 new all-time highs, with daily trading volumes hitting a record $329 billion. Global gold ETF holdings rose sharply by 41%, reaching $383 billion. However, WGC cautioned that higher gold prices may be starting to weigh on consumer demand and could lead to increased gold recycling.

The Council noted that while gold’s underlying fundamentals remain strong, its trajectory in the second half will depend on the complex interplay of global trade shifts, inflation developments, and central bank policy actions.

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World Silver Survey 2026: A Transformative Era For The Silver Market, Characterized By Extreme Price Volatility

Landmark Year Where Supply-Demand Imbalances Finally Triggered Explosive Price Action

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The World Silver Survey 2026 details a transformative era for the silver market, characterized by extreme price volatility, a shifting industrial landscape, and a definitive end to the era of “unlimited liquidity.” After years of structural deficits, 2025 emerged as a landmark year where supply-demand imbalances finally triggered explosive price action.

Price Performance and Market Dynamics

Silver witnessed a spectacular ascent in 2025, surging from under $29/oz to a December peak of $84/oz. This momentum culminated in an all-time record of $121.60/oz in January 2026, before a hawkish Federal Reserve pivot and geopolitical conflict in Iran induced a sharp correction. Despite this volatility, the gold-to-silver ratio compressed significantly, reaching a decade-low of 55:1 by late 2025, signaling silver’s outperformance relative to gold.

Supply: Record Margins and Recycling

Global mine production rose 3% to 846.6 Moz in 2025. Growth was fueled by high-grade ramp-ups in Chile, Peru, and Russia, offsetting a 5% decline in Mexico caused by regulatory shifts and falling grades. Notably, primary silver mines now account for only 26% of global supply, leaving the market increasingly dependent on by-product output from copper and gold operations.

While production rose, the real story lay in profitability. Record gold prices boosted by-product credits, driving silver miners’ All-In Sustaining Costs (AISC) down to $12.21/oz. This created a staggering 75% increase in profit margins, with nearly the entire primary silver sector remaining profitable. Additionally, recycling hit a 13-year high of 197.6 Moz, though refinery bottlenecks limited its full impact.

Demand: A Tale of Two Sectors

For the first time since the pandemic, total silver demand contracted by 2% to 1,130.6 Moz. This was driven by two main factors:

  • Industrial Thrifting: Industrial demand fell 3%, primarily due to the solar industry. As silver costs spiked to 20% of cell manufacturing costs, manufacturers accelerated “thrifting” technologies, reducing silver loading in photovoltaic (PV) cells.
  • Price Sensitivity: High prices crushed jewelry and silverware demand, particularly in India, where fabrication dropped 20%.

Conversely, physical investment remained robust. Demand for coins and bars rose 14%, led by a massive 33% surge in India and a doubling of investment demand in China.

The Liquidity Squeeze and 2026 Outlook

A critical theme of the report is the structural fragility of inventories. In October 2025, a convergence of ETP inflows and physical demand led to a liquidity squeeze in London, sending overnight lease rates to 200%. With London’s non-ETP stocks hitting record lows, the market proved it no longer has a “buffer” for sudden demand spikes.

Looking ahead to 2026, Metals Focus projects a sixth consecutive deficit of 46.3 Moz. While industrial and jewelry demand may continue to soften under price pressure, silver’s new status as a U.S. Critical Mineral and its growing role in AI data centers provide a strong floor. The market remains in a state of “permanent deficit,” where cumulative shortfalls (totaling 716 Moz over five years) ensure that silver remains a high-stakes, strategically vital asset.

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