Safe-Haven Supercycle: Gold Hits $4,690 as Silver Squeeze Intensifies

Precious metals are staging a historic rally, driven by a perfect storm of geopolitical fracturing, central bank accumulation, and industrial supply deficits. Spot Gold (XAU/USD) tapped a record high of $4,690.46 on Monday, rising 1.6% intraday as traders hedged against the escalating US-EU trade dispute and lingering tensions involving Iran.

However, the more aggressive move is occurring in the white metal. Silver has skyrocketed over 80% in the last 50 days, compressing the Gold/Silver ratio to a 13-year low of 50.57. Unlike previous rallies driven purely by monetary expansion, this surge is underpinned by critical physical shortages.

Industrial Demand Meets Monetary Panic

Market data indicates a structural disconnect in the silver market. Despite contracting US manufacturing PMI trends (ISM at 47.9%), silver demand is booming due to the green energy transition and AI hardware requirements.

• The Inventory Crisis: London vaults have seen massive outflows to COMEX as traders scramble to cover positions ahead of potential US tariffs. The UK flipped from a net exporter to a net importer of over 1,600 tons by late 2025.
• The AI Driver: High-conductivity requirements for AI data centers and next-gen photovoltaics have turned silver into a strategic asset. Oxford Economics notes silver is now trading as a “next-gen metal” rather than just a monetary hedge.

Technical Outlook

• Technical indicators for Gold show a clear ascending channel, though the RSI is pushing into overbought territory, suggesting potential for short-term consolidation near the $4,700 resistance. However, with the geopolitical landscape deteriorating, buy-on-dip remains the dominant institutional strategy.