THE BIGGER PICTURE

Precious metal prices have fallen sharply from the levels we saw at the beginning of the year. However, what has been more interesting than the prices themselves is that markets continue to behave in unusual ways. For example, why is gold sold during a war? Recent developments in the Middle East are a good example of this. Higher oil prices mean that countries importing energy need more US dollars. To meet this demand, some central banks are using their gold reserves. In other words, gold is not being sold because it has lost its safe-haven status, but because it can easily be converted into cash when needed. Meanwhile, countries such as China and Poland continue to increase their gold reserves.

Silver presents a different situation. Artificial intelligence and data centers will need more electricity and electronic infrastructure in the future. However, concerns about whether the huge investments in these sectors will generate enough profits are putting pressure on silver prices today. At the same time, solar panel manufacturers are finding ways to use less silver in production. Therefore, growth in technology does not necessarily mean that silver demand will increase at the same pace in every sector.

In platinum, weaker demand from China is attracting attention. The removal of tax benefits has increased costs and reduced platinum jewelry production in the country. At the same time, increased platinum sales by investors have further weakened demand. While the market was previously expected to face a platinum shortage, there are now expectations of a possible surplus. This is also putting pressure on prices.

Palladium, however, has a different story. Russia's Nornickel, the world's largest palladium producer, is planning upgrades to its production facilities. These upgrades could reduce production in the coming years and change the balance between supply and demand.

So, what comes next? We are living in a world that is becoming increasingly difficult to predict. In the coming days, US employment data, the Fed's interest rate policy, and oil prices will continue to play an important role in the direction of precious metals. However, recent developments remind us of something important: Precious metal prices are not determined only by wars, interest rate decisions, or economic data. Central bank reserve policies, changing industrial demand, and developments in global trade are just as important. Looking at gold in particular, sharp price movements in the short term do not necessarily conflict with its role as a store of value in the long term. After all, gold has remained important for centuries not because its price always goes up, but because it continues to play a key role in the international reserve system, even when economic and political conditions change. And despite all these uncertainties, why gold remains one of the world's most preferred stores of value is still a deeper story worth exploring…