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Gold futures saw a decline of 0.75% on Wednesday, settling just under the previous day's record high. The primary reason for the drop was a strengthening U.S. dollar, which reached its highest level in several weeks. This inverse relationship between the dollar and gold typically makes the precious metal more expensive for international buyers, reducing demand. Despite the correction, the price of gold remains near its all-time high, indicating continued underlying strength in the market.
While gold's performance garnered attention, silver's price action holds significant historical weight. On Tuesday, silver futures briefly traded above $44 for only the second time in modern trading history, a level not seen since a brief period in 2011. The 2011 rally was followed by a dramatic collapse, but silver's ability to reclaim this psychologically important price after more than 14 years signals a potential structural shift in the precious metals market, suggesting a new phase of fundamental strength. Source
San Francisco Federal Reserve Bank President Mary Daly recently expressed full support for the Fed's latest policy rate cut, and suggested that more reductions will likely be necessary to meet the central bank's dual goals of price stability and maximum employment. While she noted that the timing of these future cuts is uncertain, she believes that further adjustments are needed to continue bringing inflation down toward the 2% target while also providing support to a labor market that she described as "sustainable" but not as robust as it once was. She dismissed concerns about a recession or stagflation, viewing the recent rate cut as a form of "insurance" to protect against further weakening of the job market.
Daly's perspective aligns with the projections of most Fed policymakers, who anticipate at least one more rate cut this year, with many expecting two. However, she emphasized that these projections are not promises, and future decisions will depend on assessing trade-offs between the Fed's two mandates. She indicated that the economy still requires monetary policy to be somewhat restrictive, but not to the same degree as in the past. Daly did not provide an updated forecast on the number of cuts she expects for the year, but her remarks reinforced the view that the Fed is prepared to continue its easing cycle if economic conditions warrant it. Source
According to Adrian Day, president of Adrian Day Asset Management, the U.S. Treasury is in a better fiscal position than many had anticipated just three months ago, thanks to unexpectedly high tax revenues. He notes that the September 15th tax deadline, particularly for corporations and individuals with significant investments, brought in more money than forecasted, which has helped to replenish the Treasury General Account. However, Day warns that this positive development could be a sign of future problems, particularly with midterm elections approaching next year. He speculates that some investors may be selling off their equity holdings now to lock in gains and pay capital gains taxes, anticipating a potential market downturn.
Day also discusses the political and market dynamics at play, including a possible government shutdown. He observes that Republicans are trying to shift the narrative to blame Democrats if a shutdown occurs, a change from past shutdowns where Republicans were often seen as at fault. Regarding the bond market, he notes a decline in traditional buyers like foreign central banks and a rise in new players, such as pension funds, insurance companies, and hedge funds. Day suggests that a potential deterioration in the labor market could lead to interest rate cuts, which might bring in more buyers for longer-dated Treasury bonds. While the immediate fiscal pressure on the Treasury has eased, he does not foresee the return of traditional foreign buyers and believes the long-term trend for U.S. sovereign debt remains concerning. Source
According to Shree Kargutkar, a senior portfolio manager at Sprott Asset Management, silver’s current rally is just getting started and could follow a trajectory similar to that of palladium, which saw a nearly 600% gain over six years. He explains that palladium's price surge was fuelled by a significant and prolonged supply-and-demand deficit, a dynamic he believes is now at play in the silver market. He notes that the silver market has been in a supply deficit for the past five years, with an estimated shortfall of 800 million ounces, and that this imbalance is now starting to drive prices upward as the market awakens to the scarcity.
Kargutkar points to industrial demand as a key driver of this imbalance, highlighting silver’s critical role in technology and the ongoing energy transition, particularly in solar panels. He argues that mine supply is struggling to keep pace with demand, a situation he believes will not be resolved in the near future. The analyst also suggests that the shift from a "just-in-time" to a "just-in-case" global economy, which emphasizes domestic stockpiles, will further tighten the silver supply. This combination of a structural supply deficit, growing industrial use, and geopolitical fragmentation creates a strong foundation for a potential long-term price increase. Source
The gold market is experiencing some profit-taking as strong U.S. economic data, specifically a significant jump in new home sales, eases fears of a recession. According to the U.S. Census Bureau and the Department of Housing and Urban Development, new home sales surged by 20.5% in August, reaching a seasonally adjusted annual rate of 800,000, which is the highest level since February 2022. This robust housing data, which suggests a healthy economy, is a headwind for gold, which often acts as a safe-haven asset during times of economic uncertainty.
Despite the strong sales figures, which also saw a rise in both median and average home prices, the gold market’s reaction has been muted. The metal continues to consolidate after having recently pushed higher. This indicates that while the positive economic news is causing some profit-taking, it isn't triggering a sharp sell-off. The data also showed that the supply of new homes remains low, contributing to the elevated prices. The overall economic context, including the Federal Reserve's easing cycle, is seen as a factor supporting the housing market's improvement. Source
According to Bart Melek, managing director at TD Securities, gold has a strong chance of reaching $4,000 per ounce, driven by ongoing monetary policy loosening by the Federal Reserve and continued central bank gold purchases. Melek predicts that the Fed will enact at least one more rate cut this year, which lowers the cost of holding non-yielding assets like gold and makes it more attractive to investors. He also notes a resurgence of interest from ETF investors and proprietary traders, who are looking to capitalize on the rally they initially missed. The combination of a steeper yield curve and expectations of higher inflation further supports a bullish outlook for the precious metal.
Melek emphasizes that central bank demand is a key pillar for gold's sustained price rally. He points out that gold still constitutes a very small portion of the total reserves for many nations, particularly China, which holds only about 6.7% of its reserves in gold compared to around 70% for the U.S. and Germany. This significant disparity suggests that emerging market central banks will need to acquire millions of additional ounces to align their reserve ratios with those of developed nations. This ongoing, multi-decade process of gradual accumulation, coupled with geopolitical tensions that may lead countries to diversify their gold reserves away from Western custodians like the Bank of England, provides a long-term foundation for gold's continued price ascent. Source
According to Mike McGlone, a senior commodity strategist at Bloomberg Intelligence, gold's rally, while pushing prices into overbought territory, still has significant room to run, potentially reaching $4,000 an ounce. He notes that despite the recent surge, speculative positioning in the gold futures market is not yet overstretched compared to historical peaks. Furthermore, he highlights that even with a recent record single-day inflow into a major gold-backed ETF, global ETF holdings remain well below the levels seen in 2020. This suggests that the current rally is not solely driven by a frenzy of speculative buying, but rather a more sustainable, underlying demand.
McGlone suggests that a new catalyst may be necessary for gold to make its final push to the $4,000 mark, and he believes a correction in the record-high S&P 500 could be that trigger. He notes that gold's current rally may be signalling a future recession-related decline in equity prices, and the gold-to-S&P 500 ratio, while high, still has room to rise. Historically, a decline in equities often leads to capital flowing into safe-haven assets like gold, which would fuel its climb. While he is bullish on gold, McGlone is less optimistic about silver, predicting it would underperform gold in a recessionary environment, causing the gold/silver ratio to rise. Source
After reaching new record highs this week, gold and silver prices are experiencing a natural correction, with profit-taking and short-term selling by futures traders. This is a normal and healthy part of a bull market, as prices rarely move in a straight line. Gold had hit a record high and silver a 14-year high, both breaking out of previous trading ranges. While this upside acceleration suggests the current powerful bull run is mature, the article notes there could still be significant room for price appreciation in the near term before the rally potentially slows down.
The article highlights that the duration of this rally, not just its price, is a crucial factor to consider. For example, while gold may reach $4,000 an ounce, the time it takes to get there—whether weeks, months, or years—is an important signal of the market's health and stage. The article also points out that the U.S. dollar is up, which can be a headwind for precious metals, while crude oil and Treasury yields are also on the move. Technically, both gold and silver remain in a strong position, with key support and resistance levels to watch, but a continued acceleration in price gains could signal a final climactic phase of their bull markets. Source
According to Bernard Dahdah, a precious metals analyst at Natixis, gold's upward momentum, while strong, may be tempered by declining jewelry demand in key markets. Dahdah points out that at prices above $3,200 per ounce, there are signs of "demand destruction" in the jewelry sector, which accounts for nearly half of the total gold demand. He cites a sharp drop in Chinese jewelry demand and anecdotal evidence of a significant decline in volumes in the Middle East. While this weakness could slow the pace of the rally, Dahdah does not believe it will halt it, as growing investment and central bank demand are strong enough to compensate.
Dahdah expects that by the end of September, physical holdings in global gold-backed exchange-traded funds will have seen their largest quarterly rise since early 2022, underscoring the strength of investor interest. He also anticipates that central banks will continue to support the long-term uptrend. The analyst previously forecasted that gold could reach $4,000 an ounce by year-end, driven by a weakening U.S. dollar and U.S. Treasuries as safe-haven assets amid economic and geopolitical uncertainty. He believes that the political climate is prompting outflows from money market funds, which could further benefit gold and help it achieve his price target. Source
The global commodity market is experiencing significant disruptions, highlighted by a major supply shock in copper. Freeport-McMoRan has declared force majeure at its Grasberg mine in Indonesia, removing a key source of copper from the market and causing prices to surge. This supply disruption is compounded by simultaneous shutdowns at other major mines in Peru and Chile, further tightening the global copper supply at a time when demand from renewable energy and electrification projects remains strong.
Meanwhile, precious metals are also showing signs of significant physical tightness. Platinum, which has been a top-performing commodity this year, continues to trade in a steep backwardation, indicating a supply-demand imbalance. An expert notes that for commodities in general, the world is at the cusp of a "super cycle" driven by the massive, inflationary investment needed for the global energy transition and re-industrialization. Watch the podcast
The recent surge in gold prices, which has seen the metal climb over 45% this year and approach $4,000 per ounce, is described as historic and unnerving by Stephen Innes of SPI Asset Management. He believes this rally is more than just a reaction to inflation, arguing it is fueled by a "cocktail" of central bank accumulation, capital flight from fiat currencies, and geopolitical hedging due to systemic mistrust. Innes compares the current momentum to the chaos of 1979 and the QE-era rally of 2011, but notes that this move feels more "calculated" and anchored in "sovereign choices."
Innes suggests that central banks are deliberately driving the rally by diversifying away from the U.S. dollar, a strategic calculus that signals a shift in the global financial order. He also connects the strength of both gold and U.S. equities to "monetary debasement," as investors seek hard assets amid expanding money supply and a fraying of fiat credibility. He concludes that if the 1979 rally was about fear and the 2011 rally was a retail panic, then the current 2025 surge represents a "deliberate recalibration of the global order." Source
In this week’s Live from the Vault, Andrew Maguire exposes the mounting pressure driving the Fed towards an unavoidable US Treasury gold repricing, as BRICS accelerate non-dollar trade and China asserts itself as the new global gold benchmark.
With COMEX and LBMA stripped of their influence, surging international demand and central banks draining Western vaults, the precious metals expert details how the unfolding reset could rapidly surge the gold price towards historic levels.
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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