Gold breaks through $5,044... Silver drops 1.2%, what is causing the divergence in trends

International gold prices closed at $5,044.60 per ounce, up slightly from the previous trading day. After breaking through the $5,000 level earlier this week, gold maintained a strong consolidation trend, ultimately closing near the previous close of approximately $5,058.52, showing a slight increase. Silver prices closed at $82.33 per ounce, below the previous trading day’s $83.317, diverging from gold’s trend.

Over the past week, gold has experienced overall upward pressure, confirming a higher support level. Silver, on the other hand, exhibited broad volatility, initially dropping to a low in the $70 range before rebounding. Typically, amid geopolitical uncertainties and inflation concerns, demand for gold as a safe-haven asset expands; whereas silver’s movement is influenced by industrial demand expectations and economic sensitivity, resulting in different trend characteristics.

Gold ETFs—SPDR Gold Trust (GLD)—closed at $467.03 on February 9, continuing its upward momentum. On the same day, silver ETFs—iShares Silver Trust (SLV)—also closed at $75.985, up from the previous day, but the spread widened due to profit-taking in spot silver prices that day. ETF prices reflect investor sentiment and expectations.

Recent factors supporting gold demand include the strategic increase in gold purchases by emerging market central banks. Countries like China, India, and Russia have adjusted their foreign exchange reserve structures to increase gold holdings, which is interpreted as part of a de-dollarization policy aimed at reducing dependence on the US dollar. Especially with concerns over US financial sanctions and the global debt growth trend, these factors accelerate the trend toward asset diversification.

Both the spot market and ETF market have reflected an upward trend in gold prices to some extent, but the difference between SLV and spot silver prices appears to stem from short-term supply and demand fluctuations and differing expectations for industrial demand. The physical silver market’s instability has not yet been eliminated, while the ETF market has partially pre-empted the recovery of investor confidence.

The overall market shows a renewed preference for defensive assets. Particularly under the Federal Reserve’s continued easing stance, declining real interest rates and a weakening dollar are influencing market prices. However, the silver market remains in a state of confusion, with expectations of industrial demand recovery and volatility factors.

Current price trends indicate that the rebalancing of global central bank portfolios and government policies of major countries are becoming significant variables in financial markets. The US Trump administration’s increased protectionism and the Fed’s uncertain stance on rate cuts are seen as background factors contributing to market cautiousness.

Gold and silver are representative commodities sensitive to variables such as interest rates, prices, exchange rates, and geopolitical risks, with high short-term price elasticity and volatility. Investors should consider these characteristics and continuously monitor market conditions.