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Gold prices are maintaining their position around $3,370 per ounce, despite a recent dip from $3,454. This stability comes as the Federal Reserve has paused interest rate adjustments, indicating a "well positioned to wait" stance. However, Mike McGlone, Senior Macro Strategist at Bloomberg Intelligence, suggests this calm is deceptive, cautioning that markets are underestimating the significant risks of stagflation, mounting geopolitical tensions, and policy uncertainty. McGlone argues that the Fed remains too restrictive given the clear signs of economic slowdown, stating it's "dangerous to have the highest fed funds rate since 2007 and expect no consequences." This assessment is echoed by President Donald Trump's continued public pressure on Fed Chair Jerome Powell to implement steep rate cuts, accusing current policies of costing America billions.
Despite the broader market risks and the Federal Reserve's cautious approach, gold has continued to demonstrate resilience. McGlone views the recent pullback from its higher price as a healthy consolidation rather than a reversal, suggesting that gold's performance is a leading indicator for the rest of the market. He highlights that gold is appreciating in most currencies, which is an unusual phenomenon. A significant factor contributing to gold's strength is the ongoing accumulation by central banks, particularly from China, India, and other emerging economies, which are increasing their gold reserves to reduce dependence on the U.S. dollar. The World Gold Council reported a record 290 metric tons added by central banks in Q1 2025, continuing a trend of record annual purchases since 2022. This consistent institutional buying, coupled with the underlying macro uncertainties, paints a picture of gold as a favoured safe-haven asset in a precarious global economic landscape. Watch the podcast
The latest Kitco News Weekly Gold Survey reveals a divergence in sentiment regarding gold's immediate future. Wall Street analysts are evenly split on whether gold prices will rise, fall, or remain stable in the near term. This indecision among institutional experts comes as the market grapples with mixed economic signals and a cautious stance from central banks. Some analysts point to potential headwinds such as the Federal Reserve's hawkish tone or a shift in investor focus towards riskier assets, while others see support for gold in ongoing geopolitical tensions and the persistent threat of inflation. This balanced view from Wall Street suggests a "wait and see" approach, with many professionals on the sidelines, awaiting clearer catalysts for a decisive move in gold prices.
In contrast to Wall Street's divided outlook, Main Street investors, as reflected in Kitco's online poll, largely maintain a bullish bias for gold in the near term. This persistent optimism among retail traders likely stems from gold's traditional role as a safe-haven asset, particularly amidst concerns over global economic stability, geopolitical uncertainties, and potential currency debasement. The survey data indicates that a significant portion of individual investors anticipate higher gold prices, suggesting they view the precious metal as a reliable hedge against the various risks present in the current financial landscape. This consistent bullish sentiment from Main Street could provide a foundational level of support for gold, even as institutional players remain more cautious and divided. Source
The People's Bank of China (PBOC) continues its consistent accumulation of gold, adding another 60,000 ounces to its reserves in May. This marks the seventh consecutive month of net gold purchases by the PBOC, bringing their total holdings to 73.83 million ounces (approximately 2,296.37 metric tons). This steady buying underscores China's long-term strategy of diversifying its reserves and hedging against currency depreciation and geopolitical risks, particularly given the backdrop of ongoing trade tensions and U.S. fiscal deficits. The article notes that gold now constitutes 7% of China's international reserve assets, a notable increase from pre-pandemic levels. This consistent central bank demand acts as a significant "strength" for gold, providing a strong underlying bid that helps to support prices even amidst short-term market volatility.
While the ongoing central bank accumulation is a strong positive, the article also highlights some potential "weaknesses" and "threats" for gold. The yellow metal experienced a 2.01% decline during the week, influenced by easing Middle East tensions and Federal Reserve warnings about inflation, which have dampened safe-haven demand and reduced expectations for immediate rate cuts. Despite this pullback, gold remains up over 28% year-to-date and is still trading just below its April record high. However, some analysts, like Chris Brightman of Research Affiliates, challenge gold's safe-haven status, labelling it a "speculative asset" due to its volatility. Additionally, a Malian court ruling to place Barrick Mining Corp.'s Loulo-Gounkoto gold complex under provisional administration introduces jurisdictional risk for mining operations, which could impact future supply. Despite these concerns, the article suggests that ongoing U.S. budget deficits and interest rates, coupled with the strength of the dollar, will be key drivers for gold in the second half of 2025, potentially pushing prices toward $4,000 per ounce. Source
Gold prices are showing a modest uptick, attempting to build new bullish momentum to challenge the $3,400 per ounce resistance level. This comes despite limited support from the latest U.S. economic activity data, as revealed by S&P Global's flash Purchasing Managers Index (PMI) Composite Output Index. The index dipped slightly to 52.8 in June from 53.0 in May, indicating that while economic growth continues for the 29th consecutive month, its pace remains significantly below levels seen in late 2024. The manufacturing PMI held steady at 52.0, while the services PMI saw a slight increase to 47.7, aligning generally with expectations. This relatively "quiet" PMI data suggests a somewhat subdued economic picture, which typically offers limited immediate catalysts for strong directional moves in gold.
Despite the muted reaction to the PMI figures, gold's upward crawl suggests underlying strength, with spot gold last trading around $3,386.09 per ounce. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence, highlighted that while business activity and new orders grew, the pace has weakened, and inflationary pressures have risen sharply in the past two months. This combination of slower growth and higher inflation is likely to compel the Federal Reserve to maintain a neutral monetary policy stance, which could be supportive of gold. The report also pointed to surging prices for goods, accelerating to a three-year-high, due to tariff-related costs being passed on to consumers. This inflationary aspect, coupled with persistent global uncertainties, continues to underpin gold's appeal as a hedge, allowing it to edge higher even without overwhelmingly strong economic data. Source
Gold prices witnessed a slight uptick, hitting a session high of $3,372 per ounce, following the release of better-than-expected U.S. existing home sales data for May. The National Association of Realtors (NAR) reported that existing home sales increased by 0.8% to a seasonally adjusted annual rate of 4.03 million units, exceeding the market consensus forecast of 3.96 million. This rise, the first in three months, indicates some resilience in the housing market despite persistently high mortgage rates. While gold's reaction to this specific data point was relatively modest, the improved housing figures generally suggest a stronger economic footing, which can sometimes temper safe-haven demand for gold.
Despite the positive housing data, the underlying sentiment for gold remains influenced by broader macroeconomic factors. NAR Chief Economist Lawrence Yun acknowledged that high mortgage rates continue to subdue sales, stating that "lower interest rates will attract more buyers and sellers to the housing market." This lingering sensitivity to interest rates, alongside global geopolitical uncertainties and ongoing central bank gold accumulation, forms the backdrop for gold's price action. While a robust U.S. economy might reduce the immediate appeal of gold as a safe haven, the long-term drivers such as inflation concerns, de-dollarization efforts by central banks, and the general search for store-of-value assets continue to provide support for the precious metal, enabling it to maintain relatively elevated levels. Source
Gold and silver prices saw moderate increases in midday U.S. trading on Monday, driven by a combination of safe-haven demand and technical purchasing. The initial safe-haven bids at the start of the trading week likely stemmed from weekend U.S. military strikes on Iran's nuclear facilities, though the broader market remained "amazingly calm," which some observers found "eerily calm" given the developments. Despite this subdued overall market reaction, reports circulating about Iran preparing to retaliate against U.S. targets contributed to the mild safe-haven demand for both precious metals, indicating that underlying geopolitical tensions continue to influence investor sentiment.
From a technical standpoint, both August gold futures and July silver futures are exhibiting a firm near-term advantage for bulls. For gold, the next target for buyers is a close above the June high of $3,476.30, while bears are looking to push prices below the $3,300.00 support level. For silver, bulls aim to close above the June high of $37.405, while bears are focused on a close below $35.00. However, a bearish broadening pattern has appeared on silver's daily chart, potentially signaling a market top. Despite some analysts questioning gold's effectiveness as a safe haven and a recent price pullback, the precious metals continue to attract attention due to ongoing geopolitical uncertainties and the potential for increased investor demand for stability. Source
According to Jesse Felder, creator of The Felder Report, the current gold-to-oil ratio is at a level not seen since 2020, when crude oil prices briefly plummeted into negative territory. This extreme disparity suggests that oil is significantly undervalued compared to gold. Felder, who has been bullish on gold since early 2022, now believes that gold's impressive rally to record highs, exceeding $3,500 an ounce, has already factored in a substantial amount of negative economic news. Consequently, he has turned neutral on gold in the short term and is now focusing on oil and energy stocks as the next major investment opportunity in the commodity space, despite the recent 30% rally in West Texas Intermediate (WTI) crude oil futures due to escalating Middle East tensions.
Felder emphasizes that while geopolitical uncertainty provides some support for oil, the primary reason for his shift in focus is oil's deep undervaluation relative to gold. He views gold as a leading indicator, and its current high prices signal a much larger impending move in commodities generally, with energy being the most compelling. Felder clarifies that he is not advocating for shorting gold, as he maintains a core position and believes that gold prices will be significantly higher over the long term. However, for the immediate future, he advises investors to consider the relative value, indicating that energy presents the more attractive opportunity based on the historically high gold/oil ratio. Source
The author of this Kitco News opinion piece expresses surprise and frustration at gold's recent decline, or being "red," despite escalating Middle East tensions, specifically referencing U.S. military strikes on Iranian nuclear plants. Conventional wisdom often dictates that gold, a traditional safe-haven asset, should rally during times of geopolitical conflict and uncertainty. However, the market's actual reaction was described as "amazingly calm" by some, and "eerily calm" by others, suggesting a disconnect between perceived risk and gold's performance. The article posits that while there was an initial safe-haven bid at the week's opening, it wasn't sustained, and gold even topped out at a resistance level the author had predicted, ultimately falling lower than its pre-war escalation price.
The piece challenges the common assumption that war automatically translates to higher gold prices, suggesting that this particular conflict's impact on gold has been more in line with standard market action than an anomaly. The author implies that investors might be overly reliant on the "gold as a safe haven during war" narrative, without considering other market dynamics or technical resistance levels. The unexpected "red" performance of gold during a period of heightened geopolitical risk is presented as a counterintuitive outcome that defies typical expectations, leading to the author's strong rhetorical question in the title. Source
The article highlights a significant surge in investment demand for both silver and platinum, attributing this trend to a combination of a hawkish Federal Reserve stance and a flagging safe-haven bid for traditional assets. Investors are increasingly turning to these precious metals as concerns about inflation persist and the central bank's tightening monetary policy raises questions about economic stability. This shift indicates a re-evaluation of investment strategies, with market participants seeking alternative stores of value that can offer protection against economic uncertainties and potential currency devaluation. The increased interest in silver and platinum suggests a growing sentiment that these industrial and monetary metals could outperform in the current economic climate, moving beyond their traditional roles as mere safe havens.
Despite the broader market's focus on gold as the primary safe-haven asset, the article emphasizes that silver and platinum are gaining traction due to their dual roles as both precious metals and industrial commodities. This dual nature makes them attractive to investors looking for both capital appreciation and a hedge against inflation. The hawkish tone from the Federal Reserve, signaling continued interest rate hikes, appears to be prompting investors to diversify their portfolios beyond conventional assets like bonds and equities, which may face headwinds in a rising interest rate environment. The growing investment in silver and platinum underscores a broader trend of seeking tangible assets that can offer resilience amidst evolving economic landscapes and central bank policies. Source
UBS suggests that investors reposition their understanding of gold, viewing it primarily as a diversification tool for portfolios rather than a direct hedge against geopolitical risks. Despite recent global instability, gold has struggled to maintain price levels above $3,400 an ounce, indicating its limitations as a rapid response to geopolitical events, especially when conflicts are contained. Julian Wee of UBS underscores that gold's core value lies in its ability to diversify a portfolio, as supported by the World Gold Council's survey, which highlights its performance during uncertainty, diversification benefits, and role as a store of value. These attributes are particularly relevant in an environment characterized by unpredictable policymaking and potential shifts away from the U.S. dollar, cementing gold's strategic importance in a balanced investment strategy, even amid periods of sideways price movement.
Furthermore, gold's sustained appeal is reinforced by consistent demand from central banks and Exchange Traded Funds (ETFs), affirming its status as a liquid and politically neutral store of value. UBS maintains a bullish outlook on gold, projecting an upside target of $3,800 an ounce, but emphasizes a long-term diversification strategy over short-term crisis hedging. Beyond direct gold holdings, opportunities in the corporate debt of gold miners are also highlighted, offering attractive yields and reflecting improved financial health within the sector. This broader perspective on gold's utility in contemporary portfolios points towards a more fundamental role in managing risk and preserving wealth, moving beyond its traditional image as solely a safe haven. Source
Image Source: Kitco News
Gold and silver have exhibited a surprisingly muted response to a significant escalation of tensions in the Middle East, including direct military action. Despite the gravity of missile launches against an American military base in Qatar, which heightened the probability of further conflict, gold futures actually saw a slight decline. This performance confounds analysts who typically anticipate robust safe-haven demand during periods of direct U.S. military involvement. Silver demonstrated more resilience with modest gains, but the overall lack of a strong rally in gold, especially considering a weakening U.S. Dollar Index (which would normally support higher gold prices), suggests that selling pressure was a primary driver, potentially masking even steeper losses. This muted reaction prompts a re-evaluation of the traditional safe-haven narrative for gold in the face of contained, albeit severe, geopolitical conflicts.
The subdued reaction of precious metals, particularly gold, can be attributed to several factors beyond the immediate geopolitical situation. Market focus may be shifting towards other macroeconomic drivers, such as upcoming Federal Reserve policy decisions or broader market dynamics that are currently overshadowing regional conflicts. Investors might also be taking an optimistic view that the U.S. involvement will be limited or effective in undermining Iran's nuclear ambitions. Furthermore, there could be profit-taking or reallocation of assets by investors, leading to selling pressure that offsets any safe-haven buying. This complex interplay of factors indicates that while geopolitical tensions remain a concern, they are not the sole determinant of precious metal prices, and other economic and market forces are currently exerting a stronger influence. Source
In this week’s Live from the Vault, Andrew Maguire welcomes back NorthStar & BadCharts’ Kevin Wadsworth and Patrick Karim, who offer a clear, strategic lens on navigating shifting gold, silver and crypto markets with precision and confidence.
The duo unpack their scientific, pattern-based charting and technical analysis methodology, rooted in probability and pattern recognition, to deliver consistent, high-confidence trade setups, with a focus on timing and disciplined execution.
Disclaimer: These articles are provided for informational purposes only. They are not offered or intended to be used as legal, tax, investment, financial, or any other advice.
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