Rhona O’Connell, StoneX Financial Ltd; 22nd August 2025
Any views expressed here are of the writer and do not reflect a house view from NASDAQ.
Gold hit a new record in late April in real as well as nominal terms. We continue to think that the high is in – barring any unwanted humanitarian issues or a Black Swan event.
Daily July average compared with daily average for the previous twelve months.
Source: LBMA
Source: LBMA
Welcome to our monthly round-up of the LBMA OTC trading volumes in gold, silver, platinum and palladium, as recorded on a daily basis by the Association. These are split into spot, swap/forward, options and LoanLeaseDeposit (LLD) and give a flavour of the markets’ activity and how they were influenced by external forces and news items.
All references to COMEX or NYMEX positioning refer to Managed Money, not commercial positions.
Changes in Open interest since tariff nerves took hold.
General introduction:
Highlights: continued out-performance of the white metals vs gold
July was not that dissimilar to June in that geopolitical developments in the international arena, the continued tensions and negotiations over tariffs, and increasing debate over central bank independence all combined to hold centre stage. With the extended tariff deadline due on 1st August a number of countries struck agreements with the US Administration during July.
The most keenly -watched tariff development was the agreement that with the European Union, under which the preceding 10% blanket tariffs were raised to 15% (against a threatened 30%) and there was a degree of horse-trading about the level of inward investment that the EU would deliver into US weapons and products in the energy sector.
In one specific respect, i.e. the auto sector, which is important to many metals, the tariff on European vehicles has been kept at 27.5% until the EU initiates legislation to reduce its reciprocal tariffs on US products. A number of auto producers have announced sizeable adverse financial results, which could in the medium term knock on into demand for platinum, palladium and rhodium, as well as some silver and base metals. For example, during July majors announced the following impacts on earnings for 2025: Stellantis, $1.5Bn; Ford, $2Bn and General Motors, $3.5Bn. Volkswagen has reduced its German production capacity by 750,000 vehicles.
Elsewhere the Chinese economy continued to decelerate with industrial output up 5.7% year-on-year. This may sound strong by comparison with some other industrialised nations, but was an eight-month low. Perhaps more concerning were retail sales, growth in which was at a seven-month low of 3.7%. Housing investment meanwhile, was down 11% and house prices fell by 1%. While on an immediate basis this is more significant for the base meals than the precious (apart from silver in terms of electrical supply – especially solar) it does spill over into consumer confidence and would be an element in the very sluggish jewellery sector, which is normally at least 25% of world jewellery demand. Tariff negotiations are still in the air and there have been high level talks but no clear agreement as we write.
Meanwhile back in the States, the Federal Reserve again held the fed funds target rate in the 4.25-4.50% band for the fifth consecutive meeting, maintaining the policy of data-dependence, and while the subsequent release of the Minutes of the Meeting showed that had been some Staffers’ optimism in June over the outlook, this had become tinged with more caution in July. There was also some suggestion that ”tariff effects were masking the underlying trend of inflation and, setting aside the tariff effects, inflation was close to target”; but also that there were any number of ways of skinning this cat and that was no consensus as to how things would play out given the wide variety of industrial and commercial participants.
The Precious Metals; price action
The wide range of uncertainties outlined above, coupled with the vicissitudes of the tensions in the Middle East and over Russia-Ukraine, all meant that gold prices remain underpinned, but the increased crowding of the market from the professional investor side over the 18 months or so through to Q1 2025 also contributed to capping the upside as some rotation out of gold into the white metals continued. Silver finally lit up in early June and while gold was confined to a narrow range of less than 5% through to end July (and beyond), silver built on its June run and posted a gain of 14% from early June to 22nd July.
Meanwhile platinum’s stellar performance, which had started in May, finally reached its zenith in mid-July before staging a necessary correction; palladium, whose rally had been shallower but nonetheless impressive, topped out at the same time as platinum, in mid-July. The platinum EFP blew out dramatically (and briefly) in mid-month as a result of increased market dislocation, with London under strain.
Gold, silver, platinum and palladium, January to end-July 2025
The relative performances from gold’s peak to date back up the hypothesis that there may have been some rotation out of gold in the search for upside scope.
To summarise; from gold’s peak to date:
Rhodium +40.0%
Platinum +39.6
Palladium +19.1%
Silver +16.1%
Gold +-1%
DXY index -0.6%
GOLD
Gold turnover, July, M ounces
Source: NASDAQ, LBMA
A tired market that saw drops in volumes across the board in July
July gold volumes were down against the average of the prior 12-months. Spot was down 12%, swaps/forwards by 18%, options by 10% and LLD, by 1% – although, had it not been for one very heavy day towards month-end, LLD would have been down by 8%.
Given that July (and August) can easily be quiet times in the professional market (always provided there are no external shocks) it is worth looking at July 2025 against July 2024. Here the differences are: spot, 3%; swaps/forwards, -24%, options, -16% and LLD, -38%.
These larger numbers for the simple July-July relationship goes further to our view that the gold market has become tired, and this is also reflected in the decreasing amplitude in price reaction to external forces. For example, the price has remained mired in an 8% range since last April, after an absolute gain of 93% gain from the September 2023 through to the 22nd April 2025 peak. That was plenty of time for the market to absorb a lot of fresh investment.
Set against that background a few highlights from July are as follows: in the first week, the first and the 8th of July were the highest volumes of the whole month, reflecting a rally from $3,302 to $3,358; and a fall from $3,245 to $3,287 respectively. This looks like bargain hunting at the outset after a large drop in the latter part of June, followed by some liquidation when the rally failed at $3,366. Busy days were punctuated fairly evenly across the whole month although, as we have seen before, the peak of the mid-month price rally was reflected in heavy volumes towards the top, and heavy volume the following day on the way down. Volumes dwindled thereafter until the final day– another reversal from the month’s low, of $3,268 on the 30th.
Swaps/forwards were light in volume with the exception of two occasions; the first was on the 24th after a reasonably sharp run-up, suggesting some locking in of price; and on the final day of the month, which, given the subsequent price action, may well have been forward buying activity.
Options were very quiet with only one day of heavy action, the 23rd, the day that prices reversed and dropped sharply from $3,439 to $3,382 – before sliding lower through to month-end. This suggests some strong put option activity. Without that day’s volume the month volume would have been down by 34%.
There was some light activity in LLD in the first part, perhaps suggesting that the market was still eyeing $3,400 as a long-term resistance level and then there was nothing much at all until prices has slid below $3,350, so it may be that the steepness of the fall was spooking some market participants.
Spot gold in nominal and real terms (deflator; US CPI)
Source: Bloomberg, StoneX
Gold, year-to-date
COMEX inventories fell in the first half then swelled again, some of which may have reflected heavy imports (net 43t) into the States from Switzerland – but this is not necessarily the case. LBMA vaults accumulated 89t during the month. Over the first seven months LBMA stocks rose by 179t and COMEX inventories rose by 523t.
GOLD on COMEX, tonnes
Exchange Traded Funds slowed substantially in July, adding just 27t after quarterly averages of 67t and 57t in Q1 and Q2 respectively, also underlining that gold is losing momentum. CFTC positions saw an 18% increase over the first three weeks followed by some profit taking. Shorts varied by only 6t, ending slightly higher at 114t.
SILVER
After a lively June, silver was almost as busy in July. Spot, options and LLD were marginally lower than June levels while swaps and forwards were fractionally higher. Volume patterns differed from those of gold, with most sectors increasing in volume in the second week before dying back and then bursting into life on the 31st, especially in options and LLD.
Source: NASDAQ, helping to propel prices higher.
Early trading saw silver edge up from $36 to $37, well within the horizontal range that had prevailed in the second half of June. Things livened up when, after a short period of slippage after failing at $37, the spot price found support from both the 10- and 20-day moving averages (centred on $36.5) and reversed higher. Not only did we get the usual increase in volume on a reversal but the support from the moving averages reinforced the move and volumes picked up smartly in spot and forwards (likely industrial interest). This prompted a test of $39 at which point options took off and the price reversed again, suggesting that puts may have been in play, along with associated delta hedging. There was borrowing activity at the start of the rally, which reflects, and contributes to, tightening.
The next ten days or so, when silver was trading between $38 and just over $39, were lacklustre more or less across the board, until LLD picked up when it looked as if silver was going to fail at $40 – indeed that level may have been defended. The sharp decline over the rest of July was again in low volumes everywhere until LLD increased again (likely more hedging). On the 31st, however, all four sectors were lively – with the derivatives particularly busy as bargain hunting appeared on the approach to $36 (and the 50-day moving average helped),laying the foundation for August consolidation around $38, which is increasingly becoming a key level.
Clearly, with gold meandering along in narrow ranges and silver re-rating, the gold:silver ratio narrowed over July, from 92 down to 24 before the final slippage took it out again, to close at 90.
Gold and silver plus the ratio
ETFs, after an exceptionally busy June with the net creation of 952t, July couldn’t keep up that momentum but was still impressive with a net 572t of creations. That means 1,524t in just two months and a year-to-date total of 2,269t (Bloomberg figures). Annual mine production is ~25,500t.
CFTC: COMEX Managed Money positions: longs increased dramatically in the first three weeks, rising from 7,820t to 10,078t before a small retreat in the final week; shorts contracted in the first half then expanded again as the price eased in the second half. The month ended with a net long of 7,324t.
PLATINUM and PALLADIUM
Source: NASDAQ
The platinum market remained tight throughout July and into August, with lease rates so high that some industrial users, (such as petrochemicals, float glass, fibre glass producers) who would normally be active borrowers of metal as they changed out spent components for refurbishment), beca me outright buyers as it was cheaper to do that than to borrow.
Platinum, palladium and the ratio; May-August
Metal continued to move into NYMEX warehouses as the markets were still unsure whether platinum (and palladium) would be subject to tariffs; this is because it was not clear whether these metals, given their industrial nature, would be classified as a “bullion”, and thus be exempt, or not. We still await clarity.
Implied platinum one-month lease rate
Platinum’s rally / re-rating was running out of momentum, however, just as palladium picked up steam in platinum’s wake. Both topped out on the 18th and retreated; and each had a noticeable down-day on the 30th. The peak in mid-month related in good part to the market dislocation (metal building up in the States and higher Chinese imports) that put strain on London. The EFP blew out on Friday 18th and it was notable that there were heavy redemptions in the ETFs on that day and then on the Monday, which helped to alleviate the position. Also in the background Johnson Matthey was reminding the market around about that time that automotive demand could fall by up to 5% this year on the back of the onward march of the EV sector – at the expense of Internal Combustion Engines;
This fall may also have been partly due to contagion from weakening oil sentiment on concern over tariffs, amplified by, of more relevance to the PGM, reservations over the outlook for the economy and in particular the auto sector. The auto sector typically accounts for 40-42% of gross platinum offtake and over 80% of palladium.
Platinum, gold and the ratio
Source: Bloomberg, StoneX
On a daily trading basis both metals’ spot volumes were concentrated in the first half of the month, suggesting liquidation as the markets assessed whether platinum, in particular, had overshot to the upside. Platinum derivatives were quiet, but the steady support at $1,350 may well have induced some forward activity. Palladium, by contrast, saw some very lively action in LLD, suggesting some hedging. Once this pressure was off, palladium went on a small rally in its own right, starting before the improvement in platinum prices. Both of these two upward legs were accompanied, and no doubt aided by, some forward activity that implies industrial interest as well as fresh spot buying. The price declines in the second half included some LLD activity in platinum followed by forward activity so we seem to have had some good two-way trade over the period. Platinum’s final burst of activity came with some punchy options trading at month-end after the price had dropped to $1,300 and subsequent activity would suggest that call activity outweighed puts. Palladium also saw some option activity a week previously and the price action suggest that calls at $1,250 and possibly $1,300 were in play.
Platinum, palladium and the ratio, January 2017 to date,
Source: Bloomberg, StoneX
ETFs
Platinum: mixed, with plenty of profit taking and not much buying interest; net change over the month was a drop of 7.6t,leaving the total at 92.6t. Mine production in 2025 forecast at 168t (Metals Focus).
Palladium: again more robust than platinum, with 18 days of creations from 23 trading days. Just over 1.9tt of net creations for a total of 29.1t.
CFTC
Platinum: a gradual increase in outright longs in the first three weeks but profit taking then saw the position back to where it was at the outset. Shorts also expanded and then contracted but to a lesser degree, such that the net long increased from 20.3t to 23.5t.
Palladium: much more bullish, with longs rising from 16.7t to 20.1t, but shorts covering in from 32.4t to 26.9t, the lowest since November 2024.
Spot platinum, palladium and the spread, January 2017 to date
Source: Bloomberg, StoneX
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