(Kitco News) – While gold, silver, and platinum prices are all moving higher on Monday morning, the latest demand data for all three precious metals show potential weakness on the horizon, according to precious metals analysts at Heraeus.
In their latest precious metals update, the analysts wrote that China has followed India in reducing gold jewelry consumption amid persistently high prices.
“The Chinese Gold Association reports that total gold consumption was down 3.5% year-on-year in the first half of the year, to 505 tons,” they said. “The largest decline was in the jewelry sector which contracted 26% year-on-year to just below 200 tons. This was partially offset by a strong resurgence in bar and coin physical investment demand, plus low single-digit growth in industrial demand. According to the World Gold Council, H1’25 Chinese gold jewelry demand was the weakest since 2009 (excluding 2020).”
The analysts wrote that gold prices will have to come off their highs in order for jewelry demand in China or India to pick up in the second half. “For jewelry demand in these markets, price and perceived value are the key drivers,” they said.
“Although physical investment in China has been strong so far this year, more recently ETFs reversed to net redemptions in July,” they added. “As the gold price has been trapped in a narrow range, the domestic stock market has risen by more than 5.5%, potentially encouraging investors chasing momentum to rotate back into equities.”
The analysts noted that gold has been trading in a narrow $200 range since the end of May.
“A narrow trading range can often precede a breakout,” they said. “Gold remained rangebound last week, recovering to $3,349/oz by Friday’s close after a midweek fall.”
Spot gold is seeing a positive start to the week with prices hitting a high of $3,371.59 just after 8:00 am EDT, and last trading at $3,366.68 per ounce for a gain of 0.11% on the session.
Turning to silver, Heraeus believes that Europe’s solar demand is flagging, and total silver demand from solar is dropping.
“The European Union is expected to install less solar capacity in 2025 than it did in 2024, marking the first annual decline in nearly 10 years,” the analysts said. “The group forecasts 64.2 GW of new solar installations this year, down 1.4% from last year’s 65.1 GW, and this represents a risk to regional solar PV silver demand. The decline is driven largely by a sharp contraction in the residential rooftop segment, with installations down over 60% in some countries and more than 40% in major markets such as Poland, Spain and Germany.”
They noted that the European energy crisis that followed Russia’s invasion of Ukraine “spurred investment into solar power but falling electricity prices and reduced policy support are key factors behind the slowdown.”
“China is the global hub for silver consumption in solar panel manufacturing, so a slowdown in European installations is not likely to directly impact demand for the metal in the short term,” they said. “The largest factor expected to impact silver solar demand this year is thrifting efforts to reduce the silver content per solar cell. Rising silver prices add to the incentive to reduce silver usage, and this is currently expected to outpace installation growth, thus threatening to stop all growth in solar silver demand this year.”
Silver fell back below $37 per ounce last week and hit a low of $36.675 per ounce overnight, but the gray metal has made steady gains since. At the time of writing, spot silver last traded at $37.244 per ounce and is up 0.60% on the daily chart.
And on the platinum front, Heraeus noted that diesel demand continues to disappoint.
“The diesel powertrain segment continues to take heavy losses in the European passenger car market, and the heavy-duty sector is also under pressure this year,” they wrote. “ACEA figures show EU registrations of diesel cars were 28% lower year-to-date. Losses in diesel powertrain sales appear to be largely offset by hybrids (plug-in, full and mild). Diesel market share was 9.4% in the year to June, versus 12.8% over the same period last year. Western European platinum demand from diesel passenger cars is forecast to fall nearly 20% year-on-year in 2025 as a result of this contraction.”
The analysts warned that the trucking sector could also add downside risk to platinum autocatalyst demand. “New registrations of trucks in the EU were 15.4% lower year-on-year in H1’25 as economic headwinds inhibit demand for new vehicles,” they said. “In Western Europe, platinum diesel autocatalyst demand is split approximately 60:40 in favour of passenger vehicles (vs. commercial vehicles), so declines in both sectors could have a significant impact on regional platinum demand.”
Platinum prices fell through the $1,345 per ounce support level on Wednesday – immediately after the Fed rate announcement. “No cuts yet set the tone for selling in metals, as gold and silver also fell, though to a lesser extent,” they noted. “The US copper price also plummeted following US trade policy clarifications over the types of copper that will be tariffed, which also undermines support for metals such as platinum and silver that have a significant industrial demand component. By Friday, platinum closed 5.7% lower at $1,312/oz.”
Platinum prices are also pushing higher on Monday morning, with the spot price hitting a fresh session high of $1,330.25 shortly after 9 am EDT.
Spot platinum last traded at $1,328.56 per ounce for a gain of 0.60% on the session.
Ernest Hoffman is a Crypto and Market Reporter for Kitco News. He has over 15 years of experience as a writer, editor, broadcaster and producer for media, educational and cultural organizations. Ernest began working in market news in 2007, establishing the broadcast division of CEP News in Montreal, Canada, where he developed the fastest web-based audio news service in the world and produced economic news videos in partnership with MSN and the TMX. He has a Bachelor’s degree Specialization in Journalism from Concordia University. You can reach Ernest at 1-514-670-1339.
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