Wow, did you catch the precious metals rally Tuesday? Gold spiked past $5,200/oz and silver soared to nearly $90—all thanks to Middle East uncertainty and a weaker dollar. But is this just a short-term pop, or is the bull run still going? BlackRock’s got some key takes, let’s dive in!
With the outlook for the Middle East conflict unclear and the U.S. dollar weakening, safe-haven funds continued to pour into the precious metals market on Tuesday. As of midday, New York gold futures surged $115.80 to $5,217.20 per ounce; silver futures jumped $5.087 to $89.59 per ounce. U.S. President Trump sent mixed signals, leaving the war’s direction highly uncertain—this uncertainty has kept gold prices elevated.
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BlackRock: Precious Metals Bull Market Is Far From Over
Against the backdrop of a 75% surge in gold prices over the past year and a 148% spike in silver prices in 2025, Kristy Akullian, Head of iShares Investment Strategy for the Americas at BlackRock, released a new analysis: Precious metals have entered a phase of high volatility, but the bull market is far from ending.
“While gold pulled back after breaking $5,000, buying interest remains strong—from central banks to the crypto space, capital is pouring in,” Akullian noted. She pointed out that silver still closed 19% higher in January this year, even after a 26% single-day drop, reflecting dual drivers of investment and industrial demand, combined with low market liquidity.
Year-to-date, the volatility of gold and silver has jumped 46% and 106%, respectively. “The rally is fierce, but risks cannot be ignored,” she warned.
Akullian attributed this precious metals rally to three structural forces:
1. High Global Debt Reshapes Gold’s Value Anchor
U.S. federal debt exceeds 120% of GDP, and debt levels in developed economies like Japan, the UK, and France generally surpass 100% of GDP. History shows gold benefits significantly in such macro environments, while silver—with its industrial properties—exhibits higher volatility: Over the past 20 years, silver’s annualized volatility has been as high as twice that of gold.
2. Geopolitical Uncertainty Drives Safe-Haven Demand
Since 2020, when the S&P 500 posted a monthly decline of over 5%, gold delivered an average return of 2%, while the U.S. Aggregate Bond Index remained roughly flat. This asymmetric performance highlights gold’s value during market pullbacks.
3. Silver Faces Exploding Industrial Demand & Low Liquidity
Approximately 60% of annual silver consumption is concentrated in electronics, solar panels, and semiconductors—with the electronics industry alone consuming 445 million ounces annually. The expansion of data centers, rising AI computing power, and accelerating electrification trends are making silver increasingly sensitive to cycles and growth-oriented.
Expanding Demand Landscape: Central Banks, Private Investors, & Stablecoins Join In
Central bank gold purchases have fundamentally reshaped the global gold demand landscape. From 2022 to 2025, central banks steadily increased their gold holdings to reduce reliance on the U.S. dollar; last year, gold’s share of global reserves exceeded that of U.S. Treasuries for the first time in 30 years.
Citing surveys, BlackRock stated that 95% of central banks expect global gold reserves to continue growing in 2026—far higher than the 52% recorded in 2021. Countries like China and Brazil still have gold accounting for less than 10% of their reserves, meaning central bank buying has room to persist.
On the private wealth front, global private sector gold allocation is approximately 50% lower than a decade ago. China and India contribute nearly 60% of global consumer gold demand, while North America and Europe together account for just 15%—suggesting Western households have potential to increase their positions. Gold ETPs make up only 0.17% of U.S. private financial assets, well below their peak in the early 2010s.
Emerging demand forces also cannot be overlooked. Tether, the world’s largest stablecoin issuer, has accumulated approximately 140 tons of gold—equivalent to the 33rd-largest gold reserve globally. The stablecoin market has surged from $28 billion in 2020 to over $280 billion in 2025, and is expected to reach $1.9 trillion to $4 trillion by 2030.
Stablecoin expansion will boost gold demand through two channels: First, issuers will increase gold holdings to reduce reliance on the U.S. dollar; second, investors will turn to tokenized gold as an alternative to U.S. dollar stablecoins.
Silver: The “Gray Oil” of the AI Era
Silver’s industrial demand profile is becoming increasingly prominent. Global data center computing capacity has expanded from approximately 1 gigawatt in 2000 to nearly 50 gigawatts today, driving the construction of numerous silver-intensive computing facilities.
Solar power’s share of total industrial silver demand has risen from 11% in 2014 to 29% in 2024. By 2030, solar energy, electric vehicles, and AI infrastructure are expected to remain the main drivers of silver demand.
Dual Roles in Investment Portfolios
At the asset allocation level, gold and silver play complementary roles. “Gold has always been a strategic anchor for portfolios—it exhibits low or even negative correlation with stocks when markets are under pressure; silver is more volatile, but offers greater upside potential during economic expansion, reflation, and industrial growth, helping to enhance diversification across market cycles,” Akullian summarized.
“By combining gold’s defensive resilience with silver’s exposure to structural growth, precious metals can help investors balance stability and opportunity.”
While predicting precious metals prices has always been difficult, BlackRock remains optimistic about the outlook based on evolving demand dynamics. Falling real interest rates reduce the opportunity cost of holding non-interest-bearing assets, and many of the demand drivers behind 2025’s spectacular returns are expected to persist.
“We may still be in the early stages of a new demand wave—whether from central banks, crypto, or AI infrastructure,” Akullian said. “While 2025’s gains are unlikely to be repeated, structural support is already in place.”
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