Gold and Silver Investors Face Volatility Amid 2025 Geopolitical Uncertainties
Investors in gold and silver may need patience in 2025 as the geopolitical landscape continues to drive market uncertainty. Saxo Bank, in a January 10 note, highlighted the challenges ahead, citing a "tug-of-war" between rising yields, delayed rate cut expectations, and dollar fluctuations, which are expected to contribute to increased volatility compared to 2024.
Gold prices on the COMEX rose 1.9% week over week to $2,689.38 per ounce as of January 10, while silver prices increased by 2.7% to $30.41/oz, according to S&P Global Market Intelligence data. Saxo Bank suggested that if gold reaches $2,900/oz, silver could exceed $38/oz, buoyed by industrial demand and exchange-traded fund activity.
S&P Global Commodity Insights' Metals and Mining Research team projected gold's average price in 2025 to be $2,592.38/oz, with silver priced at $30.45/oz. "Geopolitical uncertainties continue to support gold as a safe-haven asset, while silver's industrial applications, including in energy transition technologies, are driving demand,” the team noted.
Base Metals and Industrial Metals Overview
The London Metal Exchange (LME) three-month aluminum price rose 3.1% to $2,571.50 per metric ton during the week ending January 10, while zinc slipped 0.7% to $2,868/t. Lead saw a 2.7% increase to $1,975/t, and nickel jumped 3.6% to $15,658/t. Copper climbed 2.4% to $9,091.50/t.
On NYMEX, platinum prices rose 2.1% to $965/oz, while palladium increased 2.0% to $964/oz. Conversely, 62% iron ore prices fell 1.4% to $98.09/t during the same period.
Exploration Activity Declines in December 2024
Drilling metrics hit a four-year low in December 2024, with significant declines in total projects and drillholes. Copper drilling projects dropped by 54% to 21, the lowest level since November 2020. Gold projects decreased by six to 120, while minor base metal projects fell by two to just five.
Australia and Canada, the top two countries for drilling activity, saw declines of 8% and 17%, respectively, with Australia reporting 70 projects and Canada 62.
Among active companies, Pan American Silver reported 645 drill holes across various mines, including the Whitney gold mine in Ontario, the La Colorada silver mine in Mexico, and several gold mines in Brazil, Chile, and Peru. The company increased its drilling budget to up to 450,000 meters in 2024.
Financing Developments
Chile’s state-owned Codelco raised $1.5 billion through two $750 million bond offerings to fund upgrades to aging operations. The company aims to restore annual copper production to 1.7 million metric tons by 2030.
Meanwhile, BMW Group and Yamaha Motor announced investments in Phoenix Tailings, a Massachusetts-based rare earths processing startup. The funding will help Phoenix Tailings scale operations to produce approximately 200 metric tons of rare earth metals annually.
