European Central Bank:
What does the record price of gold tell us about risk perceptions in financial markets?
Pretiorates: Thoughts 81 – The Rise of the Alternative Metals
For millennia, gold has been a safe haven where investors flee in the midst of uncertainty. But what happens when the safe haven itself begins to destabilize the system for whose stability it was originally invested in?
The first half of 2025 has been breathtaking for gold investors. In April 2025, the price of gold rose above €97/g (over $3,500/oz), marking an all-time high. In May 2025, the European Central Bank (ECB) issued a warning that has sparked debate in both financial markets and among precious metal circles: the gold market could pose a risk to the financial stability of the eurozone.
Investors' eyes are beginning to turn toward alternative precious metals. But what does all of this mean—and what can be expected on the threshold of summer 2025?
The downsides of gold's rise
ECB economists wrote in their memo that the structure of the gold markets is prone to disruptions, especially during periods of geopolitical stress. According to them: "Commodity markets are concentrated in the hands of a few large players, they use leverage, and they involve a large number of opaque OTC derivatives." In other words: if there is a sudden change in the markets – such as an increase in margin requirements or delivery difficulties – the effects can quickly spread throughout the financial system. The rise in the price of gold due to global tariffs imposed by Donald Trump triggered a spike in demand for physical gold. This led to congestion in the vaults of the Bank of England and increased Swiss exports to the United States as precious metals were melted down to be transferred from London to New York. Gold itself is not volatile. It is an immutable substance that retains its value. The markets where it is traded are anything but static. They are leveraged, concentrated, and often opaque.Platinum emerges
In their analysis published in May, Pretiorates' Thoughts 81 – The Rise of the Alternative Metals, the international investment collective Pretiorates highlighted an interesting phenomenon: platinum is making a comeback in investor favor. In China's jewelry markets, particularly in the Shuibei district of Shenzhen, the demand for platinum has exploded. The number of platinum traders has tripled within a month. The country has imported more platinum than it has in over a year—not for industrial use, but for jewelry. A clear signal: the demand is real, and the rush has begun. The "Smart Investors Action Indicator" used by Pretiorates shows that so-called smart investors are already on the move. We have not yet seen excessive overreactions, suggesting that the trend is only at its beginning. At the same time, palladium and silver are starting to show signs of recovery. Pretiorates is not a traditional analysis firm, but an independent collective specializing in technical analysis and market psychology that publishes its insights.Precious metal dynamics: more than just the price
The relationship between gold, platinum, and silver is not just a matter of price – it is also a matter of significance. Gold has been a store of value for millennia, but in today's world, where technology, geopolitical uncertainty, and economic policy shape investor behavior, the role of other metals is also changing. Platinum is not just an industrial metal – it is now also a status symbol. Silver is not just 'the poor man's gold' – it is a critical component in the green transition. And gold? It is still what people turn to when nothing else feels certain. But now, as the price of gold has risen to historic highs and the availability of physical gold tightens, investors are starting to ask: is it time to look elsewhere?What should a Finnish investor consider?
Do you already own gold?
Excellent. You have likely benefited from the price increase. Now may be the time to consider diversification.
Are you considering a purchase?
Act wisely. The price of gold is high, and availability may decrease. Ensure you have a reliable supplier. Don't settle for just a "gold account" – make sure you actually own the metal.
