Gold at $3150 – normalization in an environment of broken correlations and an absent West

Six weeks after Liberation Day, gold temporarily falls to $3,150/ounce — 10% below its record highs from just a few weeks ago — in a world where the risk of headlines remains pervasive, correlations are broken, and Asia is still leading.

And although the recent de-escalation of tensions between the US and China and major geopolitical conflicts likely removes the extreme end of macroeconomic risk, gold is by no means “dead.” As Goldman analyst Gerald Tan writes in a night note, despite 50 basis points of rate cuts being priced in over ten days, the S&P 500 has risen 20% from April lows, and the West is not actively trading, gold remains up 20% year-to-date.

It is no surprise then that Tan views this correction as healthy, as “the main drivers of dedollarization and diversification remain firmly in place.”

And while Western investors have largely been absent from this year’s rally, Goldman expects their return as the market consolidates, though another wave of position selling may be needed before long positions regain momentum.

Finally, Tan shares ten charts that make the case for gold:

1. Gold has returned to pre-Liberation Day levels, after trading in a $550 range for 6 weeks. By comparison, between 2014 and 2019, gold traded in a $500 range.

2. Chinese positions remain dominant, with an increase of nearly 9 million ounces in open interest on SGE + SHFE since March 2025.

3. Meanwhile, the West is still not actively trading, with net length on CFTC at Q1 2024 levels, when gold was $1,000 cheaper per ounce.

4. Long Gamma is the best trade, with realized volatility over 36v for 1 month, when the 1-month ATM traded at 16v before Liberation Day, 25v at the April peak, and 18v today.

5. Long riskies is also a winning strategy, with the 3-month ATM in a 6v range over the last month and volatilities significantly exceeding implied spot/vol movements.

6. Volatility of EFP and subsequent physical movements are now a distant memory, with London gold trading above COMEX for the first three months on the curve. COMEX warehouse inventories are starting to decline as more metal returns to London.

7. London forwards are returning to pre-Trump election levels, with the 3-month gold forward trading 20 basis points above SOFR after being 300 bps below SOFR three months ago.

8. Silver remains in the background over the past month, trading in a narrow $1.5 range, with the 6-month realized correlation between gold and silver at its lowest level in 15 years.

9. Realized volatility of silver is now below that of gold for the first time since 2020.

10. Rhodium is the exception among the platinum group metals — up 20% year-to-date and showing pronounced backwardation on the curve. Platinum and palladium trade without correlation to other precious metals, with lower implied and even lower realized volatility, hoping for a pickup with the start of “Platinum Week” this Monday.