According to Kitco, Heraeus's precious metal experts believe that the ceasefire in the conflict between the US, Israel and Iran was initially positively received by the market. Gold prices tend to gradually increase, while the S&P 500 index hit a new peak on April 17.
However, according to Heraeus, the developments afterwards showed that the risk had not cooled down. Transportation through the Strait of Hormuz was low, while the US began blockading Iranian ports until negotiations were proposed to be concluded.
Analysts say that the closure of the Strait of Hormuz has caused the amount of oil lost to possibly reach 1 billion barrels. The impact of this situation is forecast to be more serious if it continues.
Heraeus believes that the stock market does not seem to fully reflect the economic impacts of a prolonged conflict. In the event that prices in the US rise rapidly, inflation may overwhelm the positive business results of businesses as well as the recent upward momentum of metal prices.
According to experts, the US Federal Reserve (Fed) may be forced to raise interest rates to curb inflation. However, Heraeus noted that the FED will find it difficult to use liquidity pumping measures like in previous crises, because this measure cannot solve the supply shortage.
In the long term, the combination of economic stagnation and rising prices may create a favorable foundation for the upward trend of gold to continue," Heraeus said.
Central banks have different strategies with gold
Heraeus's report also mentioned the differences in the gold reserve strategy of central banks.
Accordingly, the Central Bank of Russia sold an additional 6.5 tons of gold in March, raising total sales from the beginning of the year to 22 tons. Heraeus believes that Russia's gold sales are aimed at handling budget deficits and rebalancing reserves after gold prices rose sharply, causing the proportion of gold in total reserves to increase.
Although Russia continuously net sold gold in the first months of the year, sales accounted for only a small proportion of total reserves. The country's gold reserves decreased from 2,327 tons at the beginning of the year to about 2,305 tons.
In contrast to Russia, Poland continues to increase gold reserves. The State Bank of Poland has raised its gold reserve target to 700 tons, from 550 tons previously. In March, the agency bought an additional 11.2 tons of gold, bringing total reserves to 581.6 tons.
According to Heraeus, Poland's move shows that the gold demand of central banks remains, even when the price of this precious metal is at a high level.
Silver demand weakens due to high prices
For silver, Heraeus believes that demand is decreasing as prices remain high.
Global silver demand fell to 1.1306 billion ounces in 2025, down 2% compared to 2024. Of which, industrial demand fell 3%, including a 6% decrease from photovoltaic applications.
Demand for coins and silver bars increased as the silver market rose in 2025, making physical metals and ETFs more attractive to investors. However, this increase is not enough to compensate for the decline in other sectors.
The groups with the strongest decreases include jewelry and silver, down 8% and 21% respectively compared to 2024.
In the electronics sector, silver demand decreased by 2%, to 449.5 million ounces. Heraeus said this decrease mainly came from the photovoltaic industry reducing silver use, replacing it with copper in some applications.
However, the picture of silver demand in high technology still has bright spots. Silver continues to be used in electric vehicles, charging infrastructure, high-performance computing hardware and data centers. High bandwidth memory is also a new source of demand, contributing to helping industrial silver demand in South Korea increase by 4%.
Heraeus believes that silver's electrical applications will become increasingly popular thanks to its good conductivity. However, in the short term, the trend of reducing silver use and weakening demand still prevails.
