Gold must breach $4,155/oz for rally to resume, silver market continues to stabilize – Heraeus

NEW YORK (November 3) Gold prices will need to see a break above $4,155 to confirm that the correction is over and the rally is back underway, while the physical silver market continues to normalize after a wild month that saw prices, premiums and flows surge, according to precious metals analysts at Heraeus.

In their latest precious metals update, the analysts wrote that the gold’s third-quarter price rise was investor-driven, with strong support from central banks. 

“The World Gold Council’s Gold Demand Trends: Q3 2025 report notes that total gold demand was 1,258 tonnes, up 16% from the previous quarter and 5% higher year-on-year,” they noted. “The gold price surged by 17% for a gain of over $500/oz during the quarter.”

“Investment demand was 537 tonnes in the third quarter, a 13% gain over the second quarter and 47% higher than in Q3’24,” they said. “Bar and coin demand grew by 3% to 316 tonnes from Q2’25 and was up 17% year-on-year. The biggest impact was from the surge in ETF investment as investors added 222 tonnes, a gain of 30% quarter-on-quarter and 134% year-on-year.”

Central banks also added 220 tonnes of gold to their reserves during Q3, an increase of 28% from the second quarter. “For the first three quarters of the year, central banks acquired 634 tonnes, some way behind the 724 tonnes that were purchased in the same period last year but still a significant amount,” the analysts said. “Unsurprisingly, record gold prices had a dampening effect on jewellery consumption in the third quarter as 371 tonnes were purchased, a 19% year-on-year drop.”

They also noted the Fed’s 25 bp rate cut last week, with Fed Chair Jerome Powell saying another 25 bp cut at the December meeting is not a foregone conclusion. “The market now shows a 69% chance of another rate cut in December, down from over 90% immediately prior to the meeting,” the analysts said. “However, if the 2-year Treasury yield stays near its current level of 3.6%, a further cut is quite likely.”

“Meanwhile, the price correction continues, with gold struggling to hold above $4,000/oz as the area from $4,000/oz to $4,050/oz is acting as resistance. If that holds then further downside is likely,” they cautioned. “The price would need to climb above $4,155/oz to give an initial indication that a resumption of the rally had occurred.”

Gold continues to hover around the key $4,000 level on Monday morning, with the spot price dipping back below $4,000 just after 11:15 am EST.

Spot gold last traded at $4,000.76 per ounce for a slight gain of 0.05% on the session.

Turning to silver, Heraeus noted that the gray metal has managed to claw back some lost ground. 

“The market started off on a defensive footing at the start of the week, with prices extending their downtrend to a one-month low of $45/oz,” the analysts noted. “Sentiment seemed to improve later in the week as the Fed delivered a 25-bp rate cut and the spot price leapt back above $48/oz. However, any hopes for a more aggressive rally were capped as the central bank signalled that further easing in 2025 remains unlikely. Investor caution was also evident in ETF activity, with nearly 10 moz flowing out over the week, marking six consecutive days of liquidation.”

“Liquidity in the silver market kept improving, as the forward curve slipped back into contango briefly before reverting to a mild backwardation,” they added. “Silver continued to flow out of COMEX warehouses last week, with 14 moz withdrawn, bringing total October outflows to 32 moz.”

Borrowing rates also eased sharply to 2.6%, down from the record 34% seen earlier in October. 

Heraeus also noted that India’s silver market is beginning to find its footing again. 

“September imports surged by 147% from August and 61% year-on-year as festival demand ahead of Dhanteras and Diwali, coupled with fierce investor appetite, sent the market into overdrive,” the analysts wrote. “The buying frenzy squeezed local supply, sending premiums to above 10%, or about $5 above official domestic prices. As the festive rush faded, premiums slipped back to just a few cents last week.”

Silver prices are declining on Monday morning, with a sharp selloff driving the gray metal to a low of $48.163 just after 10:30 am EST.

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