As investors continue to seek safe havens in these uncertain times, precious metals have been seeing a surge in demand. The latest update from UBS Securities and Trading (UBS S&T) suggests that gold and silver are leading the charge higher. According to their analysis, the recent rally in precious metals can be attributed to a risk-on tone in the market, which has led to increased buying interest.

In particular, gold premiums have held up well despite the move higher in gold prices this week. Feedback from onshore markets indicates that both the Shanghai Gold Exchange (SGE) and the Shenzhen Gold Exchange (SHFE) were net buyers, with follow-through buying today as well. While there is no sign of a frenzy in the market, UBS S&T notes that their China-based names have been better buyers of gold over the last two sessions.

It’s worth noting that volume on the Shanghai Gold Exchange (SGE) is slightly lower today compared to recent days, but there are still good two-way flows in the market. Silver, in particular, has seen a significant increase in volatility and buying interest, with prices reacting higher. Forwards, on the other hand, have remained stagnant despite the overall upswing in precious metals.

While it’s difficult to predict the sustainability of this rally, UBS S&T suggests that there are a few factors that could support further gains in gold and silver. These include a continued risk-on tone in the market, geopolitical tensions, and central bank actions. However, it’s important to keep in mind that precious metals can be volatile and subject to sudden price swings, so it’s essential to do your own research and consult with a financial advisor before making any investment decisions.

While the recent surge in precious metals prices may have some investors questioning whether it’s time to join the rally, it’s important to approach the market with caution and a thorough understanding of the factors driving these gains. By staying informed and taking a well-diversified investment strategy, you can potentially benefit from the upside while managing risk.