Precious metals took the stairs up, but the escalator down, and speculators remain in the driver’s seat – Ross Norman

In a recent analysis, Norman explained that precious metals prices once again followed the familiar pattern of taking the ‘stairs’ incrementally higher, before riding the ‘escalator’ lower again – slowly up, then rapidly down.

“January delivered dramatic rallies and record highs across the complex, while February has brought sharp corrections, partial recoveries, momentum loss and then renewed volatility, leaving the market in an ambiguous consolidation phase,” he said. “Chinese derivatives plays are having an outsized impact on price action just now, with moves often at odds with the underlying fundamentals. In short, markets are becoming unruly and unreadable.”

“In such volatile trading conditions, retail investors get burned, institutional players walk away, industrial clients re-double efforts to substitute, central banks hit the pause button and specs end up trading with themselves in a zero-sum game,” he noted. “Not helpful.”

Norman said that conventional technical analysis would want to see a retracement approximately 50% following any major decline to confirm a bull market continuation. “Most metals have achieved only partial rebounds, stalling short of key resistance levels before entering trading ranges,” he noted. “This creates an ‘amber light’ environment: encouraging for bulls due to the rebound's speed amid macro headwinds (stronger U.S. data, dollar strength, deferred Fed rate cuts), yet insufficient for bears to declare a definitive top.”

In the current environment, Norman said that gold is the standout performer, surpassing this 50% retracement threshold and trading only 12% below its recent price peak.

“Structural support from central bank accumulation, de-dollarization trends, and sovereign debt concerns persists,” he noted. “Physical demand stays exceptionally strong with bullion showrooms in the UK, Europe, and Asia reporting ‘off-the-scale’ interest, Indian premiums near but just off decade highs despite elevated prices, though Chinese seasonal demand has softened slightly.”

“Asian offtake resilience reinforces the view that the broader bull market is structurally intact, even as near-term price action is dominated by speculative flows and exchange margin adjustments,” he added.

Meanwhile, silver has shown the most weakness, still hovering around 38% below its January all-time high of $122 per ounce.

“Its explosive January gain of ~60% was largely speculatively driven, outpacing fundamentals and leaving it vulnerable to deleveraging,” Norman said. “Encouragingly, the recent wash-out in silver has removed most of the Chinese spec positions on SGE … but ...they will be back. Despite six consecutive years of supply deficits and robust industrial/jewellery demand, current dynamics are detached from these factors. Solid state batteries being produced by Samsung (and others) in particular are set to transform the market which, if it accounts for about 10% of vehicles bais 1 kg per car, would suggest fresh demand of between 6,000 and 8,000 tonnes of silver by 2035 (about one quarter of global mine supply).”

“Extreme volatility has prompted concerns among end-users; notably, major jewellery producer Pandora is shifting toward platinum-plated products to reduce silver exposure,” he cautioned.

Turning to the platinum-group metals, Norman pointed out that platinum surged nearly 50% in January to draw closer to $3,000 per ounce, but has since erased all its 2026 gains and fallen further still.

“Like its peers, it faces speculator fatigue amid synchronized hard-asset selling,” he wrote. “Fundamentals remain supportive (tight supply, backwardation, elevated lease rates), but macro factors and derivatives-driven deleveraging—exacerbated by global margin hikes (notably on China's GFEX)—dominate. Industrial clients find planning challenging amid lottery-like volatility.”

“Palladium gained ~36% in January but saw those advances fully reversed in early February (now roughly unchanged YTD, trading near $1,650–$1,680/oz after recent dips),” he added. “Demand benefits from rising hybrid vehicle production and industrial uses (AI, electronics, catalysts, up ~5% YoY), while supply contracts ~3% due to South African disruptions and North American mine output drops. Recycling provides partial offset.”

Norman’s key takeaway from the recent performance of precious metals is that speculators rather than fundamentals remain in the driver’s seat.

“Short-term price behavior across the complex is being significantly influenced by large speculative positioning, heavy adjustments in initial margins on futures exchanges, stop-loss cascades, U.S. economic resilience (strong jobs data pushing rate-cut expectations to summer), and dollar strength, rather than underlying fundamentals,” he wrote. “For long term players, nothing changes as fundamentals become more relevant – for nervous, shorter-term players, get used to being technically correct but financially wrong … oh yes, and getting stopped out too.”

Norman said that gold's relative resilience “highlights institutional conviction,” while the sharper price declines and weaker retracements in silver and platinum “reflect leveraged excess unwinding.”

“Physical indicators (especially Asian demand) suggest the structural bull case endures, but repeated flash volatility risks eroding broader investor participation,” he concluded. “Upcoming U.S. inflation data will likely provide the next major directional catalyst.”