A recent report by Heraeus highlights that gold and silver have transitioned from safe-haven assets to speculative instruments characterized by high volatility. Following a fivefold increase over the past decade, gold experienced a sharp correction, attributed to leveraged liquidations and rising margin requirements. Global gold demand surpassed 5,000 tonnes for the first time in 2025, primarily driven by investment demand. Analysts suggest that gold prices are unlikely to reach new highs in the near term, with support levels around $4,400 per ounce.
According to Heraeus precious metals analysts, gold and silver no longer exhibit the characteristics of safe-haven assets and have entered a phase of heightened volatility, signaling a fundamental shift in market dynamics for investors. In their latest market analysis, the team noted that gold has evolved into a speculative asset.
Analysts stated, "The seeds of the current price decline were sown during the exceptionally strong rally—an unusual surge for assets traditionally considered low-volatility safe havens. Over the past decade, gold prices increased fivefold, while the U.S. dollar index remained at 2015 levels. The sharp downturn likely involved forced liquidations of leveraged positions, triggered stop-losses, and increased margin requirements. Exchanges continue to raise margin requirements for futures holdings."
The report also referenced the World Gold Council's Q4 2025 Gold Demand Trends, which showed global gold demand reaching 5,000 tonnes for the first time. Analysts wrote, "This was largely due to a significant rise in investment demand, which fully offset declines in jewelry and industrial usage. Central bank purchases totaled 863 tonnes, down 21% from the record 1,092 tonnes in 2024 but still higher than any year prior to 2022. Fourth-quarter demand also hit a record 1,345 tonnes, with investment demand compensating for weakness in jewelry and industrial sectors."
Investors were advised to prepare for increased price volatility in the coming weeks and months. Analysts pointed out, "Last week, gold rebounded more strongly than other precious metals, recovering over 50% of its earlier losses, though the rally faded later in the week. Despite this, gold prices remain significantly higher than at the start of the year—a trend not yet reflected in other white metals like silver."
They added, "New highs for gold are unlikely in the short term, as unwinding the excessive speculative enthusiasm that drove prices up so rapidly will likely take months, not weeks. Support near $4,400 per ounce may be tested again."
On Monday, gold prices climbed back above $5,000 per ounce. During Tuesday's Asian and European sessions, spot gold trended lower but remained above $5,000, trading around $5,030 with a intraday decline of approximately 0.6%.
Regarding silver, Heraeus analysts noted that it has clearly entered a high-volatility phase. They stated, "After an initial rebound following the sharp drop on January 30, the rally reversed mid-week. Retail bargain-hunting drove significant inflows into silver ETFs, with holdings increasing by nearly 32 million ounces on February 4 alone, bringing total holdings back to 850 million ounces."
They further explained, "Last Thursday's sharp decline may be linked to trading activity in China, likely reflecting stop-loss selling on rebounds or profit-taking by quicker or luckier traders. Both the Shanghai Futures Exchange and the Shanghai Gold Exchange have raised margin requirements."
"Following steeper declines in silver, the gold-silver ratio jumped to 64. Just as silver outperformed gold during the rally, it has fallen faster during the correction."
During Tuesday's Asian and European sessions, spot silver trended lower, trading around $81.69 per ounce with a intraday decline of about 2%. As of 14:47 Beijing time, spot gold was quoted at $5,033.14 per ounce.