Gold SWOT: Silver Is Entering Its Eighth Deficit Year, With Inventories at All-Time Lows

Strengths

• The best-performing precious metal for the past week was gold, although it was still down about 1.34%. Despite the escalating Middle East conflict, gold fell as the 10-year Treasury yield climbed 14 basis points, strengthening the dollar. Higher energy prices from the Iran conflict also reduced expectations for near-term Fed rate cuts, with the probability of a hold at the June meeting rising to 69% from 43% the prior week, removing a key tailwind for the metal.

• According to Intellinews, Turkey’s gold stock has climbed to more than $750 billion, nearly half the size of the country’s economy, driven by record global gold prices. Turks reportedly grew $300 billion wealthier over the past year as the value of their gold holdings surged.
• K92 Mining reported Q4 EPS of $0.36, beating the Scotia consensus of $0.33, driven by lower income taxes after adjusting for a one-time impairment and unrealized derivative losses, on pre-reported production of 47,200 oz AuEq. Full-year revenue rose to $595.2 million with net earnings of $270.2 million and a record net cash position of $181.6 million. The new 1.2 Mtpa Stage 3 process plant, commissioned in December under budget, has already exceeded feasibility study assumptions, with 2026 guidance of 190,000–225,000 oz AuEq representing another major step forward as new mining fronts come online.

Weaknesses

• The worst-performing precious metal for the past week was palladium, down 2.19%. Platinum came under pressure as the Iran war drove investors toward cash and away from risk assets, with ETFs recording net sales. The Moscow Exchange’s launch of mini-futures on platinum and palladium—90% smaller than standard contracts—may spur additional speculative activity in an already volatile market, with PGM derivatives demand nearly doubling year-over-year in February.
• Gold sank after a four-day rally as traders weighed the escalating Middle East conflict against a stronger dollar and elevated inflation. Rising energy prices could feed into inflation data, increasing the likelihood that the Federal Reserve will keep rates unchanged for longer, which typically weighs on non-yielding bullion.
• Poland, the world’s largest central bank gold buyer in 2025, rattled markets after reports that Governor Glapiński proposed generating up to $13 billion from gold reserves to fund defense spending. While the plan relies on revaluing reserves rather than selling physical metal, the headline underscores how central bank actions can create short-term volatility.

Opportunities

• Silver is entering its eighth deficit year, with inventories at all-time lows and investment demand remaining strong. RBC expects the physical market to remain tight in the near term, projecting a gold/silver ratio of 60–65x over the next few years. Covered silver producers and precious metal royalty equities are pricing an average silver price of $122/ounce, above current spot levels of $90/ounce.
• Discovery Silver Corp. agreed to acquire Glencore Canada’s 100% interest in the Kidd operations in Timmins, Ontario, paying $10 million through the issuance of Discovery common shares.
• SSR Mining is selling its 80% stake in the Çöpler mine to Turkish conglomerate Cengiz Holding for $1.5 billion in cash, closing its most troubled asset and unlocking capital equivalent to over a quarter of its market cap. Combined with last year’s acquisition of Cripple Creek & Victor, the deal completes SSR’s strategic pivot to the Americas.

Threats

• Gold has largely been bypassed as a haven during today’s risk aversion, leaving it vulnerable to bearish drivers. A stronger dollar and higher government bond yields weigh on gold, which is a non-yielding asset.
• Gold may be one of the biggest pain trades of the Middle East conflict. SPDR Gold ETF positioning shows calls outnumbering puts nearly 2:1, and gold has lost 1.5% since the war began, reflecting its negative correlation with the dollar.
• Gold is on track for its first weekly decline in over a month, falling more than 3% before recovering half of the losses. Rising oil prices are pushing up yields and strengthening the dollar, while equity selloffs are forcing some investors to liquidate gold for liquidity, exposing it to risk-off flows.