Investors Pounce as Gold and Silver Pull Back!

Gold and silver continued to correct this week, with the price of gold last trading at USD $3,237oz and AUD $5,071oz.

Silver, which has lagged gold in recent times, was last trading at USD $32.37oz and AUD $50.74oz, with the gold to silver ratio (GSR) currently sitting at exactly 100, having started the year closer to 90.

The current pullback, while eye-catching from the perspective of the daily dollar moves in gold we are now seeing, so far looks like part of a textbook corrective cycle, with gold in particular having run well ahead of its 200-day moving average in recent months.

Indeed, despite the price moves seen in the past few trading days (gold is down 6% in USD terms from its late April high), both gold and silver continue to be market leaders in terms of performance this year, with gold currently up 24% in USD terms (21% in AUD), while silver is up 12% in USD terms (9% in AUD).

Clients at ABC Bullion have aggressively stepped-up their purchases throughout the week, taking advantage of what many perceive to be an overdue, well earned, healthy and most importantly short-term pullback in the precious metal market.

The chart below, which we first shared a couple of weeks ago, serves as a timely reminder that it is not uncommon for gold to return to its 200-day moving average during the inevitable corrective phases of a precious metal bull market.

USD gold price and the 200-day moving average USD gold price.

For those looking at the chart for the first time, it does not show the USD gold price itself, but rather;

• The $ per ounce the current price is above/below the 200-day moving average price in USD terms (grey shaded area)

• The % the current price is above/below the 200-day moving average price in USD terms (gold line)

• The mean, or average % that the current price is above the 200-day moving average price in USD terms (red line)

When you consider that over the duration of the above chart, which begins in late 2015 the gold price has essentially tripled in USD terms, it is fair to argue that the retracements seen along the way are a healthy part of this gold bull market.

Staying Positive on Gold Demand

The World Gold Council (WGC) recently published their Gold Demand Trends for Q1 2025. As expected, it was packed with nuggets (pun intended) of valuable information for precious metal investors.

The WGC report noted that;

• The LBMA (PM) gold price has continued to set multiple new record highs during 2025. The quarterly average price reached US$2,860/oz in Q1, up 38% y/y.

• Key factors fuelled gold’s price rise: the spectre of US tariffs, geopolitical uncertainty, stock market volatility and US dollar weakness.

• Total Gold demand in value terms almost matched the Q4 record of US$111bn. The slight uptick in demand volumes translated to a 40% y/y rise in value, due to the surging price.

• Total Q1 gold demand (inclusive of OTC investment) was 1% higher y/y at 1,206t – the highest for a first quarter since 2016. 

• Central banks bought 244t of gold in Q1, a slowdown from the previous quarter but comfortably within the quarterly range of the last three years.

• A sharp revival in gold ETF inflows fuelled a more-than-doubling of total investment demand to 552t (+170% y/y); its highest since Q1’22.

• Bar and coin demand remained elevated at 325t – 15% above the five-year quarterly average. China drove much of this increase, posting its second-highest quarter of retail investment.

• Technology demand of 80t was unchanged y/y. Ongoing AI adoption drove continued growth in the electronics sector, but uncertainty over tariffs makes for a challenging environment for the remainder of the year.

• Gold jewellery demand fell sharply in the record price environment: volumes reached their lowest since demand was halted by COVID in 2020. In value terms, consumer spending on gold jewellery grew 9% y/y to US$35bn.

 Three standouts from the report were;

• The surge in demand seen in Australia (which saw a 44% year on year increase in bar and coin demand).

• Massive inflows into gold ETFs globally, led by the United States, which  had more than 130 tonnes of metal added to them.

• Chinese bar and coin demand, which topped 124 tonnes for the quarter (see chart below), the second highest figure on record.

While talks of trade and tariffs dominate financial market headlines, it seems that American and Chinese (as well as Australian) investors are on exactly the same page.

Gold is back in vogue and only looks set to strengthen from here.

Jordan Eliseo
General Manager, ABC Bullion Australia

^{Disclaimer: This document has been prepared by Australian Bullion Company (NSW) Pty Limited (ABN 82 002 858 602) (ABC). The information contained in this document or internet related link (collectively, Document) is of a general nature and is provided for information purposes only. It is not intended to constitute advice, nor to influence any person in making a decision in relation to any precious metal or related product. To the extent that any advice is provided in this Document, it is general advice only and has been prepared without taking into account your objectives, financial situation or needs (your Personal Circumstances). Before acting on any such general advice, we recommend that you obtain professional advice and consider the appropriateness of the advice having regard to your Personal Circumstances. If the advice relates to the acquisition, or possible acquisition of any precious metal or related product, you should obtain independent professional advice before making any decision about whether to acquire it. Although the information and opinions contained in this document are based on sources, we believe to be reliable, to the extent permitted by law, ABC and its associated entities do not warrant, represent or guarantee, expressly or impliedly, that the information contained in this document is accurate, complete, reliable or current. The information is subject to change without notice, and we are under no obligation to update it. Past performance is not a reliable indicator of future performance. If you intend to rely on the information, you should independently verify and assess the accuracy and completeness and obtain professional advice regarding its suitability for your Personal Circumstances. To the extent possible, ABC, its associated entities, and any of its or their officers, employees and agents accepts no liability for any loss or damage relating to any use or reliance on the information in this document. It is intended for the use of ABC clients and may not be distributed or reproduced without consent. © Australian Bullion Company (NSW) Pty Limited 2020.}