August turned out to be a month of contrasts for precious metals, with silver charging toward $40 while gold held steady near its records. If there was any single force driving the markets in August, it was the escalating political battle over Federal Reserve independence that sent investors seeking safe havens.
August was a surprising month for the precious metals markets, and silver took the overall lead as it approached $40, while gold maintained its near-record prices. Across the markets, investors look to the ever-escalating political drama between the White House and the Federal Reserve. As we finish this recap for August, the gold market is becoming even more volatile in the first week of September, with some analysts calling for $5,000 by the end of the year.
Gold
Gold prices opened August at $3,351 and finished at $3,445, representing a modest gain of 2.8%.
As investors maintain their focus on the possibility of rate cuts, Gold pricing hovered between these peaks. Many traders are pricing in a 90% chance of a quarter-percentage-point to be announced at the September 17 FOMC meeting.
President Trump’s continued criticism of Fed Chair Jerome Powell has raised questions about central bank independence. These concerns have simultaneously weighed on the dollar while boosting demand for safe-haven assets like gold.
Silver
Silver performed the best of the precious metals in August, opening at $37.03 and closing at $39.80, gaining 7.5% for the month. More importantly, it hit $39.80 at month’s end, bringing the next big breakthrough $40 level within reach. At current prices, silver is up over 30.39% from a year ago.
HSBC raised its silver price forecasts for 2025 to an average of $35.14 per ounce, up from its previous $30.28 estimate. The reason for this increase in price confidence is that silver is often correlated with gold when there is economic and geopolitical uncertainty.
Unlike gold, silver has broad appeal as an industrial metal and a monetary asset, meaning it can benefit from two different upsides. While gold does have industrial utility, it is not as broadly applicable as silver in the market.
Platinum and Palladium
Platinum gained 4.2% in August, opening at $1,322 and finishing at $1,378 per ounce; following a big June where it saw a 27% gain, which was platinum’s strongest monthly performance since 1986. This continued performance likely stems from supply constraints in South Africa and changing trends from Chinese jewelry buyers who are buying more platinum and less gold for the first time in over a decade.
Palladium remains the most volatile of the major precious metals, and analysts offer widely divergent forecasts, with some forecasting moves toward $1,900 while others predict a possible crash to $900. There is a powerful dependence on automotive demand coupled with concentrated supply from Russia and South Africa, which keeps prices volatile.
Finally, since the elimination of electric vehicle tax credits has provided renewed and unexpected support for internal combustion engines, Palladium demand has increased since catalytic converters need it to operate.
Looking Ahead
If August was the calm before the storm, September will likely be fairly volatile across the board. Fed Chair Powell’s recent comments at Jackson Hole did little to reduce market expectations for rate cuts, which is often good news for the metals market.
Bottom Line
August demonstrated that the precious metals markets remain highly responsive to political uncertainty, even when economic fundamentals vary across different metals. Gold’s consolidation near record highs reflects broad-based institutional demand, while silver’s push toward $40 demonstrates the metal’s superior performance during precious metals rallies.
Supply deficits in silver and constraints in platinum mining regions provide fundamental support, in addition to monetary factors. Political questions around Fed independence add fresh complexity to traditional economic drivers of precious metals demand.
For investors tracking daily spot prices, August’s price action suggests continued strength ahead, particularly if rate cut expectations materialize and political tensions persist. September outcomes will depend on Federal Reserve policy clarity and developments regarding central bank independence.
Those considering buying gold or expanding precious metals allocations should evaluate current market dynamics alongside long-term portfolio objectives.
Spot price data based on CMI Gold & Silver’s daily spot price feed.
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Source: cmi-gold-silver.com
