Gold Prices Under Pressure as Silver Outperforms Amid AI Demand

The precious metals market has seen a technical rebound in recent times, but most analysts believe this rally is unlikely to be sustained. According to HSBC, JPMorgan, and Bank of America, gold remains more than $1,000 below its all-time high, and the 'death cross' shadow lingers. This could indicate that gold's medium-term bearish bias remains intact.

Silver, on the other hand, has received additional support from its industrial attributes, which some analysts believe may continue to outperform gold. Spot silver rose more than 6% from last weekend’s close to $58.89 per ounce this week, while spot gold reached an intraday high of $4,119.04 per ounce.

ING commodity strategists Warren Patterson and Ewa Manthey attributed the rally to 'bargain-hunting following recent weakness' rather than a fundamental shift in geopolitical or macroeconomic conditions. However, they noted that silver's performance reflects not only its safe-haven appeal but also benefits from improving sentiment across the industrial metals complex.

Mining company executives remain optimistic about the long-term outlook for precious metals. Diane Garrett, Executive Chair and CEO of Hycroft Mining, said the recent price pullback constitutes a 'normal correction' and that gold has surpassed U.S. Treasuries to become the largest asset class.