To The Moon

Since the outbreak of the US–Iran war on February 28, the international precious metals market has entered a period of heightened volatility. Gold and silver surged on the day the conflict began as safe-haven demand jumped, but as market sentiment continued to shift afterward, price movements became increasingly choppy and repetitive.

From the ETF perspective, precious metals funds broadly declined over the past two days as gold and silver prices turned volatile.

Among physical gold ETFs, $SPDR Gold ETF(GLD)$ fell 0.34% in a single day, $Gold Trust Ishares(IAU)$ declined 0.31%, and $Spdr Gold Minishares Trust(GLDM)$ dropped 0.29%. Gold mining equity ETFs saw larger losses, with $VanEck Gold Miners ETF(GDX)$ down 1.94%, $VanEck Junior Gold Miners ETF(GDXJ)$ falling 2.58%, and $iShares MSCI Global Gold Miners ETF(RING)$ declining 2.22%. Leveraged products experienced amplified moves: the triple-leveraged gold miners ETF $MicroSectors Gold Miners 3x Leveraged ETN(GDXU)$ dropped 6.45%, while the double-leveraged gold miners ETFs $Direxion Daily Junior Gold Miners Index Bull 2X Shares(JNUG)$ and $Direxion Daily Gold Miners Index Bull 2X Shares(NUGT)$ fell 5.04% and 3.71%, respectively.

Silver-related ETFs also posted notable declines. Among physical silver ETFs, $iShares Silver Trust(SLV)$ fell 2.72% in a single day, while $Abrdn Silver ETF Trust(SIVR)$ dropped 2.73%. In the silver mining segment, $Global X Silver Miners ETF(SIL)$ declined 2.38%, $Amplify Junior Silver Miners ETF(SILJ)$ fell 2.99%, and $iShares MSCI Global Silver and Metals Miners ETF(SLVP)$ dropped 3.26%. Leveraged products showed amplified moves as well: the double-leveraged long silver ETF $ProShares Ultra Silver(AGQ)$ fell 5.69%, while the double-leveraged inverse silver ETF $Proshares Ultrashort Silver(ZSL)$ rose 5.15%, reflecting how silver’s pullback magnified the performance of leveraged products.

On March 11, the U.S. Bureau of Labor Statistics released data showing that U.S. CPI rose 2.4% year over year in February, while core CPI increased 2.5%, marking the lowest level in nearly five years. Although the data did not significantly exceed expectations, overall inflation remains above the Federal Reserve’s long-term target of 2%. As a result, the market believes there is limited room for near-term rate cuts, and interest rates may remain elevated for a longer period, which puts pressure on gold since it does not generate interest income.

At the same time, the strengthening U.S. dollar has also weighed on precious metals. Changes in inflation expectations prompted markets to reassess the likely path of Federal Reserve policy, leading some capital to flow back into dollar-denominated assets. Because gold and silver typically move inversely to the dollar, a rebound in the dollar often results in a short-term pullback in precious metal prices.

In addition, the U.S. government announced on the evening of March 11 that it would coordinate with the International Energy Agency’s emergency energy plan and release about 172 million barrels of crude oil from the U.S. Strategic Petroleum Reserve to ease global supply pressures and stabilize market expectations. The release is expected to be carried out gradually over the coming months. However, in terms of scale, the reserve release is unlikely to fully offset the supply disruption caused by restricted shipments through the Strait of Hormuz.

Following the announcement, Brent crude prices climbed again to around $97 per barrel. Rising energy prices often signal higher future inflation expectations, reinforcing the market’s view that the Federal Reserve may keep interest rates higher for longer, which in turn places additional pressure on gold prices.

In terms of fund flows, gold ETFs have also seen notable outflows recently. After the outbreak of the Middle East conflict, some investors sold gold amid heightened market volatility to raise liquidity for other assets, leading to a decline in global gold ETF holdings. This rotation of capital among different safe-haven assets has increased short-term volatility in gold prices.

Silver has shown weaker performance than gold. As silver carries both precious-metal and industrial-metal characteristics, it tends to be more volatile when market risk sentiment shifts. Recently, a stronger U.S. dollar and fluctuations in oil prices have weakened support for silver, causing a larger pullback than gold and reflecting a temporary cooling in safe-haven demand.

From a structural perspective, the gold-to-silver ratio has also rebounded recently. Over the past year, the ratio once climbed above 100, indicating that safe-haven flows were heavily concentrated in gold at the time. As silver later staged a strong catch-up rally, the ratio quickly fell to around 50. With silver prices recently pulling back, the ratio has risen again to around 60, roughly returning to the long-term average range of 60–70 seen in recent years, suggesting that the previously extreme market structure is gradually normalizing.

From a historical perspective, precious metals bull markets often follow a pattern in which gold rises first and silver follows later. Gold tends to reflect safe-haven demand, while silver, due to its smaller market size and higher volatility, often experiences a stronger catch-up rally in the later stages of the cycle. As a result, after the gold-to-silver ratio falls rapidly, a period of consolidation or correction is generally considered a normal cyclical fluctuation.

Despite the recent short-term pullback, gold remains in a strong position for the year as a whole. Gold prices have gained nearly 20% year to date, supported primarily by geopolitical risks, continued central bank purchases, and global portfolio allocation demand.

From a market structure perspective, the $5,000 level is widely viewed as an important support zone. With tensions in the Middle East still elevated and global central banks continuing to accumulate gold reserves, medium- to long-term demand for precious metals remains intact. While the market may remain volatile in the near term, the broader trend has not yet shown clear signs of reversal.

Related ETF exposure

Among physical gold ETFs, $SPDR Gold ETF(GLD)$ is the largest gold ETF globally, with total assets of about $179.4 billion and an expense ratio of 0.40%. It has long been one of the primary vehicles used by institutional investors to gain exposure to gold. $Gold Trust Ishares(IAU)$ manages about $82.3 billion in assets and charges a lower fee of 0.25%, making it more attractive for long-term allocation-focused investors. $Spdr Gold Minishares Trust(GLDM)$ is considered a lower-cost version of a gold ETF, with roughly $33.3 billion in assets and a very low expense ratio of 0.10%, giving it a clear cost advantage.

For gold mining equities, $VanEck Gold Miners ETF(GDX)$ manages approximately $32.2 billion in assets with a 0.50% expense ratio and focuses on large global gold mining companies, making it one of the most representative gold miner ETFs in the market. $VanEck Junior Gold Miners ETF(GDXJ)$ manages about $10.6 billion with the same 0.50% fee but primarily invests in mid- and small-cap gold miners, which typically results in higher volatility. RING has around $3.6 billion in assets and charges a slightly lower fee of 0.39% while tracking the MSCI Global Gold Miners Index.

Leveraged gold products include $MicroSectors Gold Miners 3x Leveraged ETN(GDXU)$ , a triple-leveraged gold miners ETF with approximately $2.6 billion in assets and a 0.95% expense ratio, designed to amplify daily movements in gold mining stocks and typically used for short-term trading. $Direxion Daily Junior Gold Miners Index Bull 2X Shares(JNUG)$ and $Direxion Daily Gold Miners Index Bull 2X Shares(NUGT)$ are double-leveraged gold miner ETFs with about $700 million and $1.4 billion in assets respectively, each charging a 0.75% fee. Due to the leverage structure, their short-term volatility is usually significantly higher than that of physical gold or standard mining ETFs.

In the silver ETF space, $iShares Silver Trust(SLV)$ is the largest silver ETF globally, managing around $43.1 billion in assets with an expense ratio of 0.50%, making it the core vehicle for investors seeking exposure to silver. $Abrdn Silver ETF Trust(SIVR)$ manages about $6.2 billion and charges a lower fee of 0.30%, offering a more cost-efficient option for long-term investors.

Among silver mining ETFs, $Global X Silver Miners ETF(SIL)$ manages about $6.3 billion in assets with a 0.65% expense ratio and focuses on major global silver mining companies. $Amplify Junior Silver Miners ETF(SILJ)$ , with roughly $5.3 billion in assets and a 0.69% fee, concentrates on smaller silver miners and therefore tends to be more volatile. $iShares MSCI Global Silver and Metals Miners ETF(SLVP)$ manages about $1.2 billion with a relatively lower fee of 0.39%, tracking global mining companies with significant silver exposure.

Leveraged silver products include $ProShares Ultra Silver(AGQ)$ , a double-leveraged long silver ETF with about $2.3 billion in assets and a 0.95% expense ratio, designed to amplify movements in silver prices and commonly used by short-term traders. $Proshares Ultrashort Silver(ZSL)$ is a double-leveraged inverse silver ETF with approximately $170 million in assets and the same 0.95% fee, typically used for hedging or short-term trading during silver price declines.