Real-time tracking of physical metal flows enables market participants to better manage price volatility.
Gold and silver prices have experienced sharp swings over the past month amid rising geopolitical tensions in the Middle East, highlighting the heightened volatility in precious metals markets. Gold has traded in a wide range between $4,100 and $5,400 over the past six weeks, settling around the midpoint, while silver has fluctuated between $61 and $96, also stabilising near the middle of its range. Analysts link this volatility to fluctuations in oil markets and the resulting inflationary pressures.
“Volatility is being driven by a unique convergence of geopolitics in the Middle East, macroeconomics and market mechanics,” says Rafeeq Nandoli, Founder of integrated bullion trading firm Rafmoh Gold. “At present, the main catalyst is the conflict and its ripple effects across key markets including oil, precious metals, equities, and bonds. Over the medium term, shifts in expectations around US monetary policy—particularly interest rates and dollar strength—will become the dominant driver.”
He adds that higher interest rates and a stronger US dollar typically weigh on precious metals, while expectations of monetary easing tend to support gold demand as a hedge. Recent geopolitical tensions and reactions to Federal Reserve signals have further amplified price sensitivity, triggering rapid market moves.
However, Nandoli notes that deeper structural forces are also shaping the market. Central banks continue to accumulate gold at historically high levels, creating a long-term price floor. In silver, conditions are even more complex, with persistent multi-year supply deficits and its dual role as both an industrial and monetary metal intensifying price volatility.
Short-term movements are further exaggerated by technical trading factors, including algorithmic strategies and index rebalancing, which can push prices away from underlying fundamentals, he explains.
Against this backdrop, traders and refiners must carefully manage pricing, exposure, and client confidence amid rapid market shifts.
Changing buyer behaviour
Heightened uncertainty has altered institutional and wholesale demand patterns. Instead of speculative exposure through paper instruments, buyers are increasingly prioritising physical ownership and secure bullion allocation.
“We are seeing a clear shift away from speculative positioning towards capital preservation and physical holdings,” Nandoli says. “Clients are now far more focused on immediate and reliable physical delivery.”
He highlights recent market dislocations where futures prices dropped sharply while physical supply remained tight, reinforcing the importance of dependable counterparties and supply chain security. This shift places added responsibility on traders and refiners to ensure transparency, inventory stability, and custody assurance.
Benefits of an integrated value chain
For Rafmoh Gold, an integrated value chain spanning refining, minting, trading, and retail provides a key advantage in managing volatility.
“An integrated value chain is our biggest strength in volatile markets,” Nandoli explains. “We observe physical metal flows in real time—from scrap input to retail demand—which gives us a clearer understanding of true market balance.”
This visibility helps distinguish between temporary disruptions and genuine supply-demand shifts. It also allows the firm to shift operations internally when liquidity tightens in specific segments, ensuring continuity.
The model also delivers cost advantages by removing intermediary layers, enabling more competitive pricing. With full control over refining, the company maintains strict oversight of purity and certification standards.
Consistent supply is another benefit, as direct inventory and logistics control helps maintain availability even during market disruptions, reducing procurement risk for clients.
Maintaining transparency and confidence
In volatile conditions, trust becomes critical. Nandoli emphasises that transparency must be backed by verifiable data rather than assurances.
“In uncertain times, confidence is built on verifiable proof, not promises,” he says. “Clients want full visibility of where their metal is and its complete chain of custody.”
He notes that the industry is shifting toward higher standards of traceability, where origin, custody, and authenticity are as important as price. Full control over the supply chain allows Rafmoh to provide end-to-end verification and compliance assurance.
Filtering signal from noise
As markets become increasingly driven by algorithmic trading and sentiment, separating meaningful signals from short-term noise has become essential.
“While sentiment and algorithmic flows create daily volatility, the real signal comes from fundamentals such as supply deficits, central bank demand, and industrial consumption,” Nandoli explains.
He adds that when prices fall due to technical selling without a corresponding increase in physical supply, it is often a temporary distortion rather than a structural shift—sometimes creating opportunity rather than risk.
Technology and human judgment
Although digital tools and analytics are increasingly important, Nandoli cautions against overreliance on technology alone.
“Analytics and technology are essential, but they cannot replace experience and physical market presence,” he says. “They guide decisions, but human judgment is still required to understand the reasons behind market moves.”
By combining real-time data with physical trading insight, the firm manages both pricing and operational risks more effectively.
Volatility now, strength ahead
Despite short-term uncertainty, Nandoli remains confident in the long-term outlook for precious metals.
“In the short term, markets will remain sensitive to geopolitical headlines, economic data, and central bank signals, leading to continued volatility,” he says. “But our long-term outlook remains very strong.”
He points to sustained central bank buying as part of a broader de-dollarisation trend, alongside persistent silver supply deficits. These structural factors, he believes, will ultimately support higher prices over time.
“Central bank demand shows no sign of slowing, and major institutions are projecting further upside, with some gold forecasts reaching as high as $6,000 this year,” he says. However, he adds that this outlook depends heavily on the resolution of the current conflict, noting that prolonged tensions and elevated oil prices could also raise recession risks.
