Extended ceasefire only prolongs market uncertainty, gold’s medium-term prospects strengthen while silver demand slides – Heraeus

In their latest update, the analysts wrote that the indefinite extension of the Iran war ceasefire has served to prolong market uncertainty.

“Initially, this ceasefire was perceived favourably by markets and precious metals, with the gold price gradually trending upwards and the S&P 500 hitting a new all-time high on 17 April,” they noted. “Since then, however, there has been little traffic through the Strait of Hormuz, and the US has begun a blockade of Iranian ports that is set to continue until the proposed talks conclude. Up to 1 billion barrels of oil have been lost since the closure of the strait, the impact of which is only going to get worse the longer it goes on.”

The analysts said that despite this, the stock market does not appear to be pricing in the economic impacts of a longer conflict. “In this case, rising prices in the US are likely to overshadow strong company earnings and recent metals’ price rallies,” they said. “If prices do begin to rise quickly, the Federal Reserve may be obliged to raise interest rates to combat this. One problem the Fed may have is that it cannot print money as a way out of this crisis, as it has with other crises; stimulating the economy with liquidity injections will not help to alleviate supply shortages. Demand destruction is inevitable.”

“In the long run, the combination of economic stagnation and rising prices could provide fertile ground for the gold bull market to continue.”

Heraeus analysts also pointed out the divergent strategies being pursued for central bank gold reserves. “The Bank of Russia sold another 6.5 tonnes in March, taking its year-to-date selling to 22 tonnes,” they said. “Two reasons were given for this and other recent divestments: firstly, to address the budget deficit which has reached $61.3 billion, and secondly, to rebalance Russia’s reserves after the strong rally increased the proportion of gold held within the bank.”

“Although Russia has been a net seller in each month so far this year, the proportion of its reserves it has sold is small, only reducing them by roughly 1% to 2,305 tonnes, down from 2,327 tonnes at the beginning of the year,” they added. “The increase in the Russian budget deficit is likely to be due, in large part, to the conflict in Ukraine; therefore, further reductions in reserves (not just gold) can be expected until the conclusion of the conflict.”

And while Russia sells its bullion, Poland continues to accumulate more. “In January, the National Bank of Poland (NBP) increased the goal for its gold reserves to 700 tonnes, up from 550 tonnes, which it reached in late 2025,” the analysts wrote. “In March, the NBP purchased another 11.2 tonnes, taking its total reserves up to 581.6 tonnes. Poland, as of last year, now holds more gold in its reserves than the European Central Bank and showcases a continued appetite for gold even at the current higher prices.”

Gold ran into firm resistance at $4,730 per ounce earlier on Monday morning, and it continues to hover near the $4,700 level early in the North American session.

Spot gold last traded at $4,692.42 per ounce for a loss of 0.37% on the session.

Turning to silver, Heraeus analysts said demand for the gray metal is falling because of high prices.

“Global silver demand fell to 1,130.6 moz in 2025, a decrease of 2% from 2024,” they noted. “Industrial demand dropped 3%, including a 6% drop in demand from photovoltaic (PV) applications. Demand for silver coins and bars rose as the silver bull market in 2025 made physical metal and ETFs attractive investments. However, this was not enough to make up for the overall reduction from other sources. The largest decreases in percentage terms came from jewellery and silverware with contractions of 8% and 21%, respectively, relative to 2024.”

Silver demand from the electronics industry also fell in 2025, but the analysts said the picture is mixed. “Demand for silver from electronics declined by 2% to 449.5 moz last year,” they noted. “This was led by thrifting silver for copper in the PV industry, which made up 186.6 moz of the overall electronic demand in 2025. Although PV demand fell, increasing amounts of silver are being used in high-tech electronics. This demand comes from electric vehicles along with charging infrastructure and the high-performance computing hardware used in datacentres.”

“High-bandwidth memory, for example, is a growing source of demand for silver, leading to South Korea’s industrial demand for the metal rising by 4%,” they added. “Electrical applications for silver due to its conductive properties will become more prevalent as high-tech industries build out, although for the time being, thrifting and demand destruction are dominant.”

Investment demand for silver rose significantly in 2025, however. “Coin and net bar demand increased 14% to 217.2 moz in 2025,” they said. “The rise was driven heavily by India where demand rose 33% year-on-year, with East Asia and the Middle East also seeing significant growth in investment demand. Exchange-traded products saw inflows of 273 moz, up 26% from 2024, though this trend reversed in early 2026 as investors started taking profits following the silver price rally.”

Heraeus also agrees with the market consensus that the Federal Reserve will hold rates unchanged at its April meeting later this week. “The press conference following the decision announcement will likely be more important as Fed Chairman Jerome Powell will provide an insight into how the committee is viewing the recent rise in the CPI and the rate path going forward,” the analysts warned.

Silver prices have twice failed to break above $76.585 per ounce earlier on Monday, and they continue to trade near the bottom of their daily range.

Spot silver last traded at $75.363 per ounce for a loss of 0.44% on the daily chart.