Futures Hint at Gold Surge

McAlvany Weekly Commentary

Ongoing tariff fears pushed futures markets above $3,500 and hints at a potential gold breakout. With continued rising inflation, and a high likelihood of a September rate cut, the precious metals market is positioned for strong gains. Let’s take a look at where prices stand as of Wednesday, August 13: The price of gold is down 0.5% at $3,380 since our recording last Wednesday. Gold did break $3,400 at one point in between recordings. The price of silver is up 1.5% at $38.53, inching its way back up and that is definitely helping our ratio situation between gold and silver. Platinum is dead even, sitting at $1,341 from a week earlier. Palladium is down 1.5%, currently sitting at $1,140, which is helping that platinum to palladium ratio out. Over on the paper markets… The S&P 500 is up about 0.5% at 6,468, putting in another new high this week although that is following a pretty significant down day on Friday. The US dollar index is down 0.5%, currently sitting at 97.8. Gold Futures Rise on Tariff Rumors Gold futures hit an all-time high above $3,500 due to fears that gold bullion would be targeted by tariffs, but these gains reversed once the White House denied tariff rumors. The spot gold price remained relatively stable, signaling speculative leverage in futures markets and underlying bullish sentiment. This volatility underscores the impact of global trade tensions and the importance of watching both spot and futures prices for direction. Gold: Strong Institutional, Weak US Retail Demand Gold is in a strong bull trend, now sitting just below $3,400. While a pullback is possible, technical analysis and prominent forecasters like Chris Vermillion point to the potential for spot gold to reach as high as $4,100—a 17–20% move this fall if conditions align. Physical gold demand remains robust among central banks and institutional buyers amid growing concerns over fiat currency debasement, while US retail demand for gold coins and bars is notably down 37%. In contrast, European and Asian demand is surging, up dramatically in Germany and other markets. The supposed “wave” may not be obvious to US retail investors yet, but history suggests the physical market eventually catches up with price and institutional momentum. Strength in Silver Importantly, silver outperformed gold this week, up more than 31% year-to-date compared to gold’s approximate 27%, and is closing in on the psychologically significant $50 level. This dynamic has tightened the gold-silver ratio and implies further outperformance for silver if trends continue. Meanwhile, the 2025 silver supply deficit remains substantial at 117 million ounces, following a 2024 deficit of 148 million ounces. Expanding industrial uses—such as solar, electronics, EVs, defense, and even AI—are accelerating demand, making silver second only to oil in application breadth. The gold-silver ratio remains well above its 40-year average, signaling silver as undervalued. A significant amount of naked shorting in the paper silver market means that rising prices could force a dramatic short-covering rally. Every $1 rise in silver costs swap dealers $262 million in losses, setting the stage for heightened volatility and potentially explosive price action. Platinum Turns Bullish, Palladium Lags Platinum finally broke out of a decade-long funk, moving up to around $1,500 and erasing its long-standing bear market. Technicals suggest a stair-step bull move toward $1,850 as the next resistance, potentially over the next six to nine months. Palladium, meanwhile, still looks bearish, only recently hinting at a trend reversal. We’re Here to Help As a precious metals advisor, McAlvany is here to help guide you in building a portfolio that serves your unique needs. Whether you want investment protection, a secured retirement, or a lasting legacy, our team of advisors will review portfolio strategy and help you take advantage of market opportunities. Give us a call for your complimentary, no obligation consultation at 800-525-9556.