Gold price touches $5,200 high, silver once reached $88... ETF volatility widens amid central bank purchases

On the early morning of the 16th (Korea time), international gold prices traded around $5,025.10 per ounce, continuing a slight decline from the previous trading day. Compared to the previous day’s closing price of $5,019.83, it remained flat but retreated from the mid-week high of around $5,200 reached last week. The spot silver price was $81.39 per ounce, slightly up from $80.60 on the 13th, stabilizing after a correction that began early last week from the $88 level.

On that day, gold and silver prices remained generally stable in direction, but over the past week, their retracement extent and speed showed differences. Gold, with its strong safe-haven attributes, reacts sensitively to geopolitical tensions and monetary policy uncertainties, gradually adjusting from above $5,200. Silver, with a larger industrial demand component and higher volatility, rose near $90 before correcting to just above $80, now seen as seeking a balance between industrial and investment demand.

In the US New York stock market, the SPDR Gold Shares ETF (GLD) closed at $460.84 on the 13th (local time), continuing a mild decline from the previous week’s close of $473.51 on the 6th. After rebounding to $477.86 on the 10th, it fell back to just above $460 later in the week, with increased trading volume in the latter half. The iShares Silver Trust (SLV) traded between the mid-$75s and above $80, closing at $72.69 on the 13th, showing a larger correction than GLD. The ETF price movements seem to reflect short-term profit-taking and portfolio adjustments.

It is believed that the background involves strategic gold and silver reserves by central banks and governments of Russia, China, India, and others, alongside US sanctions and tariff pressures. Russia announced plans to expand its gold and silver reserves over the next three years. Meanwhile, the People’s Bank of China continues to buy gold, and imports of precious metals from Russia have surged. Geopolitical and policy risks, such as the Trump administration’s high tariffs on Russian oil transactions affecting China, India, and the EU, the deadlock in Ukraine peace talks, and increased political-economic cooperation between Russia, China, and India, are influencing gold and silver prices.

From the combined analysis of physical and ETF markets, physical prices remain relatively firm within the historical high range, while ETF prices show slightly increased volatility in the latter half of the week. Physical prices are buffered by central bank gold purchases and long-term demand expectations, whereas ETF prices, structurally sensitive to short-term interest rates, stock market trends, and exchange rates, exhibit rapid capital inflows and outflows, leading to differing reactions. Both markets also reference ongoing discussions about central bank gold and silver accumulation in recent years and strategies by BRICS countries to reduce dependence on the US dollar as investment variables.

Current gold prices, having maintained most of their gains since the beginning of the year, are experiencing a correction phase, signaling that defensive assets remain favored amid geopolitical risks and monetary policy uncertainties. Silver, after a relatively strong rally this year, is also undergoing a correction, reaffirming its characteristic volatility driven by intertwined industrial and investment demands. In the ETF market, recent days have shown signs of selling pressure on GLD and SLV, but overall, there is a cautious wait-and-see attitude as prices hover in high ranges.

The discussions on BRICS countries expanding their gold and silver reserves, intertwined with US tariffs and sanctions, are cited as variables increasing uncertainty in the US dollar system and the broader commodities market. Movements in central banks adjusting gold holdings, increased domestic gold purchases in Russia, and concerns over silver demand related to green energy and electronics industries contribute to a complex environment where defensive factors coexist with sensitivity to economic cycles.

Given that gold and silver are highly responsive to interest rates, exchange rates, monetary policies, and geopolitical variables such as wars and sanctions, short-term volatility remains possible. Besides structural factors like central bank gold buying, industrial demand, and ETF capital flows, market participants generally recognize that sudden policy announcements or geopolitical news could cause significant short-term swings in prices.