A Cold Reflection After the January Gold Rush.

Shanghai Stock Exchange Gold and Silver Futures Achieve Epic Gains: Gold +18.36%, Silver +54.91%, Outperforming All Assets. But on January 31, the sentiment suddenly shifted, with spot gold plunging 8.95% in a single day and silver halving by 26.37%—both breaking records for gains and losses.
The true supply-side situation is severely underestimated. Global gold supply’s annual compound growth rate is only 1%, with total supply in 2024 at 4,957 tons—almost zero growth. Mine gold accounts for 75%, but declining ore grades, stricter environmental regulations, and insufficient capital have resulted in less than 1% growth over the past three years. Recycled gold, being price-sensitive, is also seeing decreasing additions in 2025—holders are reluctant to sell at high prices, indicating institutional expectations remain.
Historical patterns are clear: during periods of increased supply, gold prices tend to fall. From 1980 to 2000, during the technological dividend period, production doubled, and gold prices declined by 73% over 20 years. From 2010 to 2018, during the capital dividend period, production increased by 32%, and gold prices retraced 36% from their highs.
But 2026 will be different. Mine gold has entered a high-cost, low-elasticity phase, with supply reaching a ceiling. The slowdown in recycled gold additions reflects institutional reluctance to sell. Goldman Sachs targets $5,400, UBS sees $6,200, and Morgan Stanley’s bullish scenario is $5,700—this is not hype, but a reassessment of supply and demand.
Limited supply, demand still unfolding.