With markets closed in the US due to Presidents’ Day and in China due to the Lunar New Year, the new week has started with very thin trading volumes in global markets. This has led to some profit-taking and a digestion of prices in precious metals following the sharp volatility seen at the end of January. Gold is fluctuating just below the $5,000 level, moving in the $4,980–$5,050 range. On one hand, geopolitical risks such as tensions in the Middle East and the Iran–US axis continue to support safe-haven demand. On the other hand, relatively softer inflation data from the US is keeping expectations alive that the Fed may continue rate cuts later this year. This combination still provides a supportive medium-term backdrop for gold.

Silver prices are trying to hold in the $76–$78 range. Ongoing physical withdrawals from COMEX and LBMA vaults show that physical supply remains tight.  Although Shanghai is closed today due to the Lunar New Year holiday, the latest pre-holiday prices indicate that silver in Asia is still trading at a premium to Western markets (around 4%). The fact that this price gap has not closed, even while the market is shut, suggests that physical demand remains stronger in Asia and that tightness in the global silver market continues. China’s introduction of export licensing for silver has added further uncertainty on the supply side, raising concerns that silver may become harder and more expensive to source going forward. Meanwhile, CME’s increase in margin requirements has forced some leveraged traders to close positions, contributing to sharper and more volatile short-term moves in silver prices.

Platinum prices are trying to stabilize above the $2,000 level. High leasing costs and continued tightness in the physical market indicate that supply conditions have not eased yet.  In addition, Chinese jewellery manufacturers have recently been shifting from gold to platinum, suggesting that the medium- to long-term story for platinum remains intact.

Palladium, meanwhile, is showing a weaker tone around the $1,679 level. Structural pressure from the automotive sector, driven by the ongoing shift toward electric vehicles and lower demand for catalytic converters, continues to weigh on palladium relative to other precious metals.

Overall, the potential for a weaker US dollar over the medium term, expectations of Fed easing, and rising geopolitical uncertainty continue to provide strategic support for precious metals.  However, during these holiday-thinned trading sessions, it is natural for prices to react more sensitively to headlines and short-term news flow.