The price of gold was on the rise this week, briefly breaking above US$4,800 an ounce for the first time since mid-March.
Silver also had a bullish trend and reached around US $ 77.50 per ounce.
The prices of both precious metals have fallen since the start of the Iran war, and have been accelerated by US President Donald Trump’s announcement this week of a two-week ceasefire.
I’m seeing a lot of questions about why gold and silver prices have gone lower, not higher, since the war began, and I think it’s definitely a topic we should continue to investigate.
I recently heard from Dr. Mark Thornton of the Mice Institute, who said that gold’s decline is actually because the yellow metal is doing its job. Here’s how he explained it:
“There is a small subset of market participants that want to sell gold, not buy gold, if a war starts. And so people in the Persian Gulf, the Levant, Syria, Israel, Palestine, Jordan, the Gulf states, we would expect them to sell gold to finance their governments, or finance their businesses, or raise cash and get out of there. So in the context of the emergency, while we’re all speculating in the long run If the price of gold is going up – and I believe it will – in the short term, those people exit the industry, causing the price of gold to fall even further.
“So gold turned out to be exactly what it was advertised to be: a hedge against risk and times of trouble and all that. We just have to pay attention to who is facing the biggest risk and what they’re going to do about it.”
What do gold and silver prices mean going forward? The broad consensus among the experts I spoke to is that the bullish trend is far from over.
And interestingly, some central banks are taking advantage of the decline with Chinese gold reserves last month Their biggest growth is being recorded From February 2025.
But given global geopolitical uncertainty, it is difficult to know when prices will rise again.
At the time of writing, the ceasefire was on rocky ground Israel continues attacking Lebanonand the Strait of Hormuz still essentially closed.
Oil prices remain volatile, and although they took a hit when the ceasefire was announced, the long-term impact of the closure of the strait could be significant.
One beneficiary so far has been Russia calculations from reuters It shows its oil tax revenue will double in April Demand for Russian oil is increasing.
I spoke to Dr. Marc Faber of the Gloom, Boom & Doom Report, who said that while he’s not particularly interested in buying stocks right now, oil companies do have some appeal: “If I had to buy stocks, I’d buy some oil stocks, but I think I’d buy some mining companies as well. Although I think the mining stocks that aren’t doing well will go down first.”
Faber is a frequently requested guest and I was excited to talk to him for the first time. Gold of course was another topic he covered, and although he thinks it may be short, the context is important – he expects a widespread decline in asset prices, with gold likely to be in a better position than others:
“I don’t think I’m fond of gold, but in my asset allocation — I’ve written about this for the last 40 years — about 25 percent of my assets are in gold and 25 percent in real estate, and 25 percent in stocks and about 25 percent in bonds and cash.
“I feel most comfortable with gold, but I want to emphasize here that I don’t think gold will necessarily go up in an environment of liquidity tightening. But it may go down less than other commodities, and it may be relatively safe.”
Bullet Briefing – Guyana gold deal, deep sea mining
G Mining to buy G2 Goldfields
With M&A in the air, G Mining Ventures (TSX:GMIN,OTCQX:GMINF) has announced plans to acquire G2 Goldfields (TSXV:GTWO,OTCQX:GUYGF) in an all-stock deal.
The transaction, valued at an estimated US$2.13 billion, will bring together G Mining’s Oko West project and G2’s Oko-Ghani project, both located in Guyana.
The companies say the combined asset will have the potential to produce more than 500,000 ounces on a lifetime average basis, with first production from Oko West targeted for the second half of 2027.
Deep sea mining site heats up
Also on the M&A front, American Ocean Minerals and Odyssey Marine Exploration (NASDAQ:OMEX) said they merger plan To create important deep sea mineral platforms.
According to the companies, the resulting entity will be worth US$1 billion, and will focus on deep-sea critical mineral research and resource extraction. The leadership team will include former Rio Tinto (ASX:RIO,NYSE:RIO,LSE:RIO) CEO Tom Albanese.
The move comes as the importance of critical minerals is increasing across the world.
And it also comes in the form of Metals Royalty Company (NASDAQ:TMCR) Nasdaq debut – The company plans to acquire royalties and streams of critical minerals, and right now its only royalty is on the NORI deep-sea polymetallic nodule deposit.
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Securities Disclosure: I, Charlotte McLeod, have no direct investment interest in any of the companies mentioned in this article.
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