Gold continues to benefit from strong demand, with central banks increasingly building strategic reserves. Poland (31 tonnes) and Uzbekistan (25 tonnes) were among the largest buyers in Q1 2026, while China, Kazakhstan, and the Czech Republic have also added significant amounts of gold to their strategic reserves. This provides an important structural source of demand that can partially offset weaker jewellery consumption.

In India, the world’s second-largest jewellery market, gold jewellery demand fell 19% YoY to 66.1 tonnes in Q1 2026 as record prices reduced fine-weight purchases (World Gold Council).

Gold’s near-term direction remains closely tied to USD and interest rates. As a non-yielding asset, gold becomes relatively less attractive when Treasury yields rise due to higher opportunity cost of holding gold. A stronger USD also tends to weigh on the gold market, as it gets more expensive to purchase gold which is priced in USD. However, recent softer U.S. inflation and labour-market data have reduced expectations for a near-term Fed tightening, helping gold rebound. Gold has since recovered above $4,300/oz, suggesting that the $4,000 level could provide meaningful technical support.

Silver offers a higher-beta way to express the precious metals view. Unlike gold, silver has significant industrial demand, particularly from solar photovoltaics, electronics, automotive applications, and electrification. The long-term growth of these industries should support consumption, while the market is expected to remain in structural deficit for a sixth consecutive year in 2026 (46.3 million oz).

Overall, gold is likely the more defensive play, supported by central bank accumulation and its role as a hedge against currency, inflation, and geopolitical risk. Silver should benefit if gold continues higher, but its smaller market and industrial exposure can amplify both upside and downside. With silver at $65/oz, the $55/oz area likely remains a key support level.