Why Precious Metals No Longer Move Together

Precious metals markets are entering a period where individual fundamentals matter more than broad sector sentiment. While gold remains heavily influenced by monetary policy expectations and central bank demand, silver and palladium are now responding to industrial trends tied to artificial intelligence, electronics and energy transition technologies. That shift suggests investors may need to rethink long-held assumptions that precious metals move as a single asset class. Market participants with direct visibility into both investment and industrial demand are increasingly identifying separate drivers for each metal.

Rhona O'Connell, StoneX Head of Market Analysis for EMEA and Asia, has spent decades analyzing global precious metals markets through multiple commodity and monetary cycles. Her perspective combines macroeconomic analysis with detailed knowledge of physical demand, allowing her to identify structural changes that extend beyond short-term price movements.

Key Themes from the Discussion

• Gold's recent correction reflects positioning, liquidity pressures and interest rate expectations rather than a change in its long-term outlook.
• Silver demand is increasingly supported by AI, semiconductor manufacturing, solar technology and electrification.
• Palladium producers are investing in new industrial applications to offset declining demand from internal combustion engines.

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Silver Demand Is Building Independent Momentum

Silver is becoming increasingly driven by industrial consumption rather than simply following gold prices. O'Connell argues that it almost certainly will break away from gold over time as demand from artificial intelligence, semiconductor manufacturing and electrification expands. She also notes that "it's only price discovery that's going to bring those markets back into balance" because silver mine supply remains relatively inelastic, with much of global production coming as a by-product of other metals. Stronger industrial demand could therefore influence silver pricing even during periods when gold consolidates or weakens.

Palladium Innovation Extends Market Potential

Palladium's long-term outlook is also evolving beyond the traditional internal combustion engine narrative. O'Connell highlights Norilsk Nickel's investment in developing new industrial uses, explaining that the company has launched a $100 million programme and is already pursuing dozens of commercial applications. She notes that researchers are investigating partial substitution for silver in solar cells and gold in electronics while also exploring AI-assisted materials development. Innovation could in fine help diversify palladium demand and reduce dependence on the automotive sector over the coming years.

Frequently Asked Questions

Why could silver stop following gold prices?

According to O'Connell, expanding industrial demand from AI, semiconductors, solar energy and electrification could increasingly drive silver independently of gold's investment demand.

Why are central banks still buying gold?

Central bank purchases are primarily influenced by reserve diversification, confidence in the U.S. dollar and long-term policy objectives rather than short-term price movements.

What is supporting the outlook for palladium?

Producers are investing in new industrial applications, including electronics, solar technologies and advanced materials, to broaden future sources of demand.

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--- Written by Frédéric Guetin, StoneX TV Producer

--- Expert: Rhona O'Connell, StoneX Head of Market Analysis, EMEA and Asia