Silver and gold have experienced considerable rallies over the past year, but both metals faced sharp corrections this month as geopolitical uncertainty appeared to ease. However, Subramaniam argues the selloff reflects misplaced optimism rather than changed fundamentals.
“When gold sneezes, silver catches a cold”
“Silver has a complicated supply shortage as well as industrial demand complicating its life,” Subramaniam explained in an interview with ET Now. “They say that when gold sneezes, silver catches a cold. So the small drop in gold” triggers amplified moves in the smaller silver market.
The market expert identified two primary drivers supporting precious metals prices: the ongoing dedollarisation trend and geopolitical safe-haven demand. While the latter has taken a temporary hit, the former remains firmly intact.
Trump peace talks: Ephemeral hope or lasting change?
Recent diplomatic overtures by former President Trump—including upcoming Iran talks and discussions with other global leaders—have created what Subramaniam calls a potential “peace dividend” that’s pressuring precious metals. However, he remains deeply skeptical of lasting outcomes.
“Mr. Trump’s these meetings in the past have proved to be very ephemeral. Remember the Putin meeting in Alaska when we thought the war was going to get solved and months later we are nowhere,” Subramaniam noted, emphasizing that “Trump uncertainty risk premium still prevails.”
The expert argues that emerging countries who have been “gradually getting rid of dollar exposures and gradually accumulating gold and other precious metals” will continue this trend throughout Trump’s term regardless of temporary diplomatic breakthroughs.
The Kevin Warsh puzzle: Inflation hawk contradicts Trump agenda
A surprise development adding complexity to the precious metals outlook is Trump’s selection of known inflation hawk Kevin Warsh for a key position. Subramaniam called this appointment puzzling given Trump’s vocal demands for aggressive rate cuts.
“Why on earth would he go and choose a person whose stated position is an inflation hawk?” Subramaniam questioned, suggesting the appointment “has thrown a real spanner or a monkey wrench into the works.”
If Warsh maintains his hawkish stance, a stronger dollar could emerge—potentially undermining one pillar of precious metals support. However, Subramaniam advocates a “wait and watch” approach to see whether this represents “a changed Mr. Warsh or the old Mr. Warsh.”
Price targets: Double-digit gains through year-end
Despite near-term volatility, Subramaniam projects “at least a double-digit appreciation from today’s levels till year-end,” specifically targeting mid-teens percentage gains for both gold and silver.
This forecast rests on continued dedollarisation demand combined with genuine supply constraints, particularly for silver which faces both investment and industrial demand pressures.
Copper and industrial metals: Supply crisis brewing
Beyond precious metals, Subramaniam highlighted mounting supply pressures across industrial metals like copper. With no fresh mines being discovered and industrial demand accelerating for electrification and green energy infrastructure, a “supply-driven price rise” appears inevitable.”We know silver is the best conductor of electricity but copper is slightly behind, aluminium is slightly behind,” he explained, noting that unlike precious metals where dedollarisation trends can be quantified, industrial metals remain “probably the most unpredictable price” to forecast after currencies.
Oil’s hidden geopolitical game
In a surprising analysis, Subramaniam suggested Trump’s energy policy may be a calculated pressure tactic against Russia. With the International Energy Agency predicting 3.7-4 million barrel excess oil supply by year-end, Brent crude could fall below $60 or even touch $50.
If Iranian or Venezuelan oil returns to markets, India—a major Russian oil buyer—could pivot away from Russian purchases, economically weakening Moscow and potentially forcing more constructive Ukraine negotiations. Subramaniam speculates this could be Trump “building the case” for a future Nobel Peace Prize bid.
Investment strategy: Look beyond the noise
For investors concerned about the recent precious metals selloff, Subramaniam’s message is clear: this is noise, not signal. The structural drivers supporting gold and silver—dedollarisation, supply constraints, and persistent geopolitical uncertainty—remain intact despite temporary diplomatic theater.
“It is just a speculative position getting unwound,” he concluded, advising patience as markets digest the Warsh appointment and assess whether Trump’s diplomatic initiatives have any lasting substance.
This analysis represents expert market commentary and should not be considered investment advice. Precious metals carry significant volatility and investors should conduct thorough research before making investment decisions.